Exhibit 7-14 Cost curves
In Exhibit 7-14, the U-shaped LRAC curve indicates which of the following as quantity increases from 0 to 4,000?
A. Diseconomies of scale; constant returns to scale; economies of scale.
B. Constant returns to scale; economies of scale; diseconomies of scale.
C. Economies of scale; constant returns to scale; diseconomies of scale.
D. Economies of scale; diseconomies of scale; constant returns to scale.
Answer: C
You might also like to view...
The main disadvantage of an emissions tax is that
a. The total pollution reduction from an emissions tax can not be known for sure b. Firms lack the flexibility to pursue different technologies c. Firms do not have an incentive to reduce pollution d. Firms can not be behave in an economically-efficient manner e. Differences among firms are not incorporated into the policy
If buyers were required to pay the federal excise tax on gasoline directly to the government, the demand curve for gasoline would shift up
Indicate whether the statement is true or false