If a Firm Has a Long- Run Average Cost of $2

question 72

Multiple Choice

If a firm has a long- run average cost of $2 when it produces 4,000 units of an input and has a long- run average cost of $1 when it produces $10,000 units and the firm needs 10,000 units of the input, the firm_______ experience economies of scale, which makes the firm ________ likely to make the input rather than buy it.

• A)does; less
• B)does not; less
• C)does; more
• D)does not; more

---

Definitions:

F Statistic

A value used in statistical analysis to determine the ratio of variance between groups relative to variance within groups.

Regression Analysis

A statistical technique that models the association between a dependent variable and one or more independent variables.

Sales Data

Information collected about the sales performance of a company or product.

Advertising Data

Information collected about the performance, reach, and impact of advertising campaigns.