The Decreasing Portion of a Firm's Long Run Average Cost

question 135

Multiple Choice

The decreasing portion of a firm's long run average cost curve is attributable to:

• A) diminishing returns to scale.
• B) increasing marginal cost.
• C) economies of scale.
• D) diseconomies of scale.
• E) constant returns to scale.

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Definitions:

Model Village

A community or settlement established as a prototype or for the purpose of demonstrating particular socio-economic strategies or architectural styles.

Interposition

A visual cue in which one object partially covers another, leading the observer to perceive it as closer.

Weber's Law

A principle of perception that states the smallest change in a stimulus that can be detected is a constant proportion of the stimulus level.

Fechner's Law

A principle in psychophysics stating that the perceived intensity of a stimulus changes proportionally to the logarithm of the actual stimulus intensity.