Table 13-17 Consider the Following Table of Long-Run Total Cost for Four

question 467

Multiple Choice

Table 13-17
Consider the following table of long-run total cost for four different firms:
-Refer to Table 13-17. Which firm has economies of scale and then diseconomies of scale as output increases from 1 to 7?

• A)Firm 1
• B)Firm 2
• C)Firm 3
• D)Firm 4

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Definitions:

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Marginal External Damages

Additional harm or cost imposed on society or a third party that is not accounted for by the producer or consumer of a good or service.

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service, including both the cost to the producer and the cost to society of any environmental or other externalities.

Monopoly

Market with only one seller.