What Is an Example of the Scale Effect

question 4

Multiple Choice

What is an example of the scale effect?

• A) Workers choose to provide more hours of labor when the wage rate decreases.
• B) The firm hires more labor as long as the marginal product of labor is positive.
• C) The firm expands output when production costs fall.
• D) The firm expands output when production costs increase.
• E) The firm hires more labor when the wage falls because labor has become relatively cheaper compared to the price of other factors of production.

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