-The Above Figure Shows the Isoquants for Producing Steel

question 61

Multiple Choice

-The above figure shows the isoquants for producing steel.Decreasing returns to scale are

• A) present when producing more than 10,000 tons.
• B) present when producing more than 20,000 tons.
• C) present when producing more than 30,000 tons.
• D) never present.

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Definitions:

Shift

In economics, a movement or change in the position of a supply or demand curve in response to external factors.

MC, AVC, ATC Curves

Graphical representations in economics of the marginal cost, average variable cost, and average total cost, respectively, which firms use for production and pricing decisions.

Economies of Scale

Cost advantages that businesses obtain due to the scale of operation, with cost per unit of output generally decreasing with increasing scale.

Long-Run Average Total Cost Curve

A curve that shows the lowest average cost at which a firm can produce any given level of output in the long run, when all inputs are variable.