Suppose RioTintoAlcan Is Considering the Construction of a New Aluminum

question 128

Multiple Choice

Suppose RioTintoAlcan is considering the construction of a new aluminum smelter in Northern Quebec,the operation of which requires a great deal of electricity.Suppose also that the price of electricity is predicted to rise significantly in the near future.As a result,the firm decides to embark on new research and development which leads to the development of a new production technique that uses less electricity per tonne of aluminum produced.This is an example of

• A)the marginal rate of substitution between factors.
• B)innovation away from increases in factor prices.
• C)short-run cost minimization.
• D)short-run profit maximization.
• E)long-run economies of scale.

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