Refer to the Graph Above to Answer This Question

question 52

Multiple Choice

Refer to the graph above to answer this question. All of the following statements except one is correct. Which is the exception?

• A) The LRAC curve illustrates both the advantages of the division of labour and the law of diminishing returns.
• B) Economies, diseconomies and constant returns to scale are illustrated in the LRAC curve.
• C) Given the LRAC curve illustrated, a firm could be too small or too large.
• D) Diseconomies of scale exist at output levels above Q₂.

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Definitions:

Automatic

Pertains to something functioning by itself with little or no direct human control.

Passive

Accepting or allowing what happens or what others do, without active response or resistance.

Overexposing

The act of providing too much information or stimulus to the point where it becomes overwhelming or has a negative effect.

Phenomenon

An observable event or fact, especially one that is not fully understood or that is out of the ordinary.