When a firm is experiencing diseconomies of scale:
A. It should increase the amount of labor it hires
B. It should lower its price to the competitive level
C. Its average total costs will decline if it reduces its scale of operations
D. It should increase the size of its plant to decrease its average total costs
C. Its average total costs will decline if it reduces its scale of operations
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Fill in the blank: Firms in a so-called perfectly competitive market would face a(n) ________ demand curve for their product
A) horizontal B) upward-sloping C) vertical D) downward sloping
Which of the following is a positive side effect of business start-ups and the business failures that often follow?
a. The process makes it possible to try out numerous new ideas, and some of them will substantially improve our lives. b. The process increases total employment, and leads to a lower rate of unemployment. c. The process generates additional revenue for the government, which will then be used to produce goods and services that people value. d. This is a trick question. There are no positive side effects of business failures.