If economies of scale are relatively important in an industry, the typical firm's
A) long-run average cost curve will reach a minimum at a level of output that leaves room for a large number of firms to enter the industry.
B) long-run average cost curve will begin rising before it reaches minimum efficient scale.
C) long-run average cost curve will reach a minimum at a level of output that is a relatively large fraction of total industry sales.
D) marginal cost curve will decline continuously until it reaches minimum efficient scale.
C
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Spending on the war in Afghanistan is essentially categorized as government purchases. How do increases in spending on the war in Afghanistan affect the aggregate demand curve?
A) They will shift the aggregate demand curve to the right. B) They will move the economy up along a stationary aggregate demand curve. C) They will move the economy down along a stationary aggregate demand curve. D) They will shift the aggregate demand curve to the left.
If the marginal propensity to consume is 0.7 and if output increases by $200, then consumption spending
A) increases by $70. B) decreases by $70. C) increases by $140. D) decreases by $140.