If the Wages a Firm Pays It Workers Increase Then

question 132

Multiple Choice

If the wages a firm pays it workers increase then

• A) the firm's long- run average cost curve does not shift and there is no movement along the long- run average cost curve.
• B) the firm moves rightward along its long- run average cost curve but not necessarily to where it has diseconomies of scale.
• C) the firm moves rightward along its long- run average cost curve to where it has diseconomies of scale.
• D) the firm's long- run average cost curve shifts upward.

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Definitions:

Primary

Refers to first in order, importance, or original sources of information obtained directly from first-hand experience or research.

Economies of Scope

Cost advantages that a business experiences by producing a wider variety of products, rather than specializing in the production or provision of a single product or service.

Diseconomies of Scale

A point at which a company grows so large that the costs per unit increase with the increase in production.

Experience Curve Effects

The reduction in unit costs of production as output increases, typically due to gained efficiencies and learning over time.