When the Long-Run Average Cost Curve Is Downward Sloping

question 81

Multiple Choice

When the long-run average cost curve is downward sloping,

• A) economies of scale are present.
• B) diseconomies of scale are present.
• C) the average fixed cost curve must be upward sloping.
• D) the firm experiences constant returns to scale.
• E) The premise of the question is wrong because long-run average cost curves never slope downward.

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Countries that have a developed industrial base and a significant level of economic activity in the manufacturing sector.

Developing Nations

Countries with a lower standard of living, underdeveloped industrial base, and lower Human Development Index relative to other countries.

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The act of residing in a country without the legal permission of its government.

Complementary Inputs

Inputs that are used together in production, such that the decrease in the price of one input increases the demand for the other input.