Constant returns to scale means that as all inputs are increased
A) total output remains constant.
B) average total cost rises.
C) average total cost rises at the same rate as do the inputs.
D) total output increases in the same proportion as do the inputs.
D
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Which of the following describes what would happen after an increase in oil prices?
a. A downward shift of the aggregate supply curve as unit costs decrease, followed by a gradual increase in the wage as employment increases, leading to a leftward shift of the aggregate supply curve b. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment decreases, leading to a leftward shift of the aggregate supply curve c. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment decreases, leading to a rightward shift of the aggregate supply curve d. A downward shift of the aggregate supply curve as unit costs decrease, followed by a gradual decrease in the wage as employment decreases, leading to a rightward shift of the aggregate supply curve e. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment increases, leading to a rightward shift of the aggregate supply curve
What is minimum efficient scale? What is likely to happen in the long run to firms that do not reach minimum efficient scale?
What will be an ideal response?