The portion of the long-run average cost curve in which economies of scale are experienced shows that as output increases, the
A) average total cost decreases.
B) average total cost increases.
C) marginal cost increases.
D) marginal cost decreases.
E) average variable cost is constant and the average fixed cost decreases.
A
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If the demand curve for bottled water shifts rightward and the supply curve of bottled water shifts rightward, the equilibrium
A) price of bottled water definitely increases. B) price of bottled water definitely decreases. C) quantity of bottled water definitely increases. D) quantity of bottled water definitely decreases.
Insurance companies provide higher insurance premiums to plans with lower deductibles as a way of:
A. reducing the lemons problem. B. avoiding moral hazard. C. screening between types of drivers. D. optimizing information acquisition.