If Long-Run Average Total Cost Decreases as Output Increases, This

question 141

Multiple Choice

If long-run average total cost decreases as output increases, this is due to

• A)declining average fixed costs.
• B)the law of diminishing returns.
• C)economies of scale.
• D)externalities.

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Definitions:

New Monopolies

Emerging dominant players in a market that manage to obtain exclusive control over a product or service, often through innovation or consolidation.

Existing Monopolies

Firms that have exclusive control over a market or product, allowing them to set prices higher than in competitive markets due to a lack of alternatives.

Interest-Rate Cost

The expense associated with borrowing funds, expressed as a percentage of the total borrowed amount.

R&D Expenditure

Financial spending devoted to research and development activities by a company or organization.