If the Output Rate Is Increased but the Average Unit

question 136

Multiple Choice

If the output rate is increased but the average unit costs also increase, we are experiencing:

• A)market share erosion.
• B)economies of scale.
• C)diseconomies of scale.
• D)value-added accounting.
• E)step-function scaleup.

---

Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers at various price levels.

Consumer Surplus

The divergence between the aggregate amount consumers are willing and have the means to pay for a good or service, and what they truly pay.

Producer Surplus

The disparity between what sellers are ready to take for a product or service and the actual amount they get.

Minimum Imposed Price

A price floor set by the government or other regulatory body, above the equilibrium price, to prevent prices from falling too low.