___________: is the difference between the current market value of a building (or improvement) and the total cost to construct it new. This difference generally increases with building age.

If a firm enjoys economies of scale, _____.

(A) Its average total cost will increase as production increases. (B) Its total costs will decrease as production increases. (C) Its average total cost will decrease as production increases. (D) Its marginal revenue will increase as production increases.

The local lemon market has the following supply and demand relationships:

QD = 100 - 5p - po + 2I QS = 4p where p is the price of lemons (per pound), Q is the quantity of lemons in pounds, I is the average consumer income, and po is the price per pound of oranges. Derive the equilibrium price and quantity of lemons as functions of the price of oranges and average consumer income. Use the calculus method of comparative statics to compute the effects of income and the price of oranges on the equilibrium price and quantity of lemons.