When Production Is Characterized by Persistently Declining Long-Run Average Costs

question 40

Multiple Choice

When production is characterized by persistently declining long-run average costs as output increases

• A) the costs of production are greater when competition exists than when a single firm produces a good.
• B) it is impossible for two firms to compete in the market.
• C) the costs are lower if a single firm exists, and even if the firm is unregulated, price will still be lower with a single firm.
• D) there is no need for the government to limit competition by licensing requirements.

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Definitions:

Test Statistic

A calculated value used in statistical hypothesis testing that helps decide whether to reject the null hypothesis.

P-Value

A statistical measure that helps determine the significance of results, indicating how likely it is that findings could have occurred under the null hypothesis.

Test Statistic

A statistic calculated from sample data and used in hypothesis testing to determine the plausibility of the null hypothesis.

Null Hypothesis

A hypothesis that there is no significant difference or relationship between specified populations, which serves as a default position until evidence indicates otherwise.