Plot the Following Data for Quantity of Production and Long-Run

question 72

Essay

Plot the following data for quantity of production and long-run average cost for a firm. Are there economies of scale, diseconomies of scale, or constant returns to scale? Indicate these areas in your diagram.

---

Definitions:

Correct Rejection

In signal detection theory, the accurate identification that a signal is not present.

False Alarm

An erroneous alert or notification indicating the presence of a threat or condition that in reality does not exist.

Miss

To fail to hit, reach, catch, or otherwise make contact with something; also used to express a feeling of loss or absence.

Signal-detection Theory

A framework for understanding how individuals discern between important stimuli and background noise under conditions of uncertainty.