Economies of scale exist whenever long-run average costs:
a. Increase as output is increased
b. Remain constant as output is increased
c. Decrease as output is increased
d. Decline and then rise as output is increased
e. None of the above
c
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If a natural monopoly has an average cost pricing rule imposed, the rule will
A) maximize total surplus in the regulated industry. B) generate an economic loss for the regulated firm. C) reduce the consumer surplus and generate a deadweight loss when compared to a marginal cost pricing rule. D) set price below marginal cost.
A fiscal stimulus was initiated by President Obama in response to the economic downturn of 2008-2009 . At that time, the president's economists estimated the multiplier to be
a. 3.2 for government purchases and 2.0 for tax cuts. b. 2.4 for government purchases and 1.4 for tax cuts. c. 1.6 for government purchases and 1.0 for tax cuts. d. 1.6 for government purchases and 0.4 for tax cuts.