Graphically, economies to scale are illustrated by
A) a downward sloping long-run average cost curve.
B) a horizontal long-run average cost curve.
C) an upward sloping long-run average cost curve.
D) a long-run average cost curve that is shaped like an upside down U.
Answer: A
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Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12
If the market price is $11 then the market supply for this good will be A) 3 units. B) 4 units. C) 1 unit. D) 2 units.
When a government allows raw materials and other intermediate products to enter a country duty free, this generally results in a(an)
A) effective tariff rate less than the nominal tariff rate. B) nominal tariff rate less than the effective tariff rate. C) rise in both nominal and effective tariff rates. D) fall in both nominal and effective tariff rates. E) rise in only the effective tariff rate.