Jack Loves Surfing but Prefers to Go in Winter Instead

question 197

Multiple Choice

Jack loves surfing but prefers to go in winter instead of summer and always tries to find spots most surfers usually avoid.What could be one of the reasons for which Jack chooses to surf in this way?

• A)he only likes to surf in dangerous circumstances
• B)having other surfers around imposes a negative externality on Jack
• C)the spots most surfers avoid usually have the best conditions
• D)he doesn't want to impose a negative externality on other surfers by taking their waves

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Definitions:

Diseconomies of Scale

A situation where an increase in production leads to higher average costs for firms, contrary to economies of scale.

ATC

Average Total Cost, the total cost divided by the quantity of output produced; it's a measure of per-unit production cost.

MC

Short for marginal cost, it represents the change in total cost that arises when the quantity produced is incremented by one unit.

Herfindahl Index

An economic measure of market concentration, calculated by summing the squares of the market shares of all competitors within an industry.