When Long-Run Average Costs Decline as Output Increases, the Firm

question 98

Multiple Choice

When long-run average costs decline as output increases, the firm is experiencing

• A) negative returns to scale.
• B) diseconomies of scale.
• C) constant returns to scale.
• D) economies of scale.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers, with no single participant able to significantly influence the market price.

Coconuts

In economic models or exercises, often used as a commodity or goods to demonstrate concepts of trade, barter, or economic principles more simplistically.

Fish

Aquatic cold-blooded vertebrates typically covered with scales and equipped with fins, serving as a significant food source, recreational sport, and economic commodity worldwide.

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