Comment on the following statement: "The shape of a firm's long-run average cost curve is determined by both external and internal economies (or diseconomies) of scale."
What will be an ideal response?
The statement is false. The shape of a firm's long-run average cost curve is solely determined by internal economies (or diseconomies) of scale. External economies (or diseconomies) of scale shift the firm's long-run average cost curve.
Economics
You might also like to view...
According to the text, the cost-plus-markup procedure
A) is the only sensible way to set prices. B) is a sure-fire way to ruin a business. C) is a general rule of thumb for price searchers. D) can be practiced only by price takers.
Economics
The marginal product is the slope of the:
a. marginal cost curve. b. total cost curve. c. total product curve. d. long-run average total cost curve
Economics