Which of the following explains why long-run average total cost at first decreases as output increases?
a. diseconomies of scale
b. less efficient use of lumpy inputs
c. fixed costs become spread out over more units of output
d. gains from specialization of inputs
e. marginal costs rise at a slower rate than average costs in the short run
D
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If the supply of a good is inelastic, _____.
(A) Producers have diminishing marginal returns of labor. (B) A small increase in price will lead producers to sharply increase their quantity supplied. (C) Producers will increase their quantity supplied in response to sharp drops in the market price. (D) Producers will not change their quantity supplied by much even if the market price doubles.
During the "computer revolution" of the 1980s and 1990s, many firms replaced old technology with new technology. What might explain why firms don't change technology as quickly today?
What will be an ideal response?