Suppose That When a Firm Increases Output by 50%,long-Run Total

question 13

Multiple Choice

Suppose that when a firm increases output by 50%,long-run total cost increases by less than 50%.The firm will experience

• A)diminishing marginal returns.
• B)decreasing marginal rate of technical substitution.
• C)economies of scale
• D)diseconomies of scale

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Definitions:

Exponential Decay

A process described by a decrease in quantity at a rate proportional to its current value, often observed in radioactive decay and depreciation of assets over time.

Complex Arithmetic

Mathematical operations that involve complex numbers, including addition, subtraction, multiplication, and division, where complex numbers are numbers with both real and imaginary parts.

Fraction Notation

A way of expressing a portion of a whole, using two numbers divided by a bar or slash, where the top number (numerator) is divided by the bottom number (denominator).

Exponential Notation

A mathematical way to express repeated multiplications of a number by itself, commonly written as a base raised to the power of an exponent.