The Long-Run Average Cost Curve Will Be Upward Sloping When

question 61

Multiple Choice

The long-run average cost curve will be upward sloping when the firm is experiencing:

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

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Definitions:

Marginal Productivity

The additional output that is produced by using one more unit of a factor of production, keeping all other factors constant.

Income Distribution

The way in which a nation’s total income is distributed among its population.

Factor Markets

Markets where services of the factors of production (land, labor, capital) are bought and sold.

Maximize Profit

The process or strategy undertaken by businesses to increase their net earnings and achieve the highest possible profit margin.