In an Industry Where Firms Experience Internal Scale Economies, the Long-Run

question 39

Multiple Choice

In an industry where firms experience internal scale economies, the long-run cost of production will depend on

• A) individual firms' fixed costs.
• B) the size of the labor force.
• C) whether the country engages in intra-industry trade.
• D) the size of the market.
• E) whether the country engages in inter-industry trade.

---

Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity produced, representing the cost per unit of output.

Marginal Costs

The cost incurred by producing one additional unit of a product or service.

Market Price

The amount at which a good or service is currently sold in the market, determined by supply and demand.

Produce

To create, manufacture, or grow goods and services for consumption or sale.