Economies of Scale

question 39

Multiple Choice

Economies of scale

• A)Exist in both the short run and the long run.
• B)Explain why average variable and average total costs decline in the short run.
• C)Explain why average total costs decline as output increases in the long run.
• D)Explain why average total costs increase as output increases in the long run.

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Definitions:

Sales Promotion

Direct inducements offering added value or some other incentive for buyers to enter into an exchange.