Which of the Following Statements Is Correct If a Firm

question 39

Multiple Choice

Which of the following statements is correct if a firm builds a larger plant and,at any particular output,its short-run average cost increases?

• A)Diseconomies of scale must be present.
• B)Economies of scale must be present.
• C)Constant returns to scale must be present.
• D)Economies,diseconomies,and constant returns to scale are all possible.

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Definitions:

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in a market, often to maximize their profits illegally or unethically.

Collusive Agreements

Arrangements or agreements, often illegal, between competing firms to limit competition, control prices, or divide markets among themselves.

Cartel

A formal agreement among competing firms to control the market for a certain product by setting prices, limiting supply, or other restrictive practices.

Cartel

An association of manufacturers or suppliers agreed upon restricting competition and controlling prices within a particular industry, often to maximize collective profits.