Generally Speaking, If a Firm Faces Decreasing Average Total Costs

question 152

Multiple Choice

Generally speaking, if a firm faces decreasing average total costs of production throughout its entire range of output, then

• A)more firms will enter the market.
• B)it will be unable to remain in business.
• C)the firm is a natural monopoly.
• D)the firm is able to earn only a normal profit.

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Definitions:

Corporate Form

A legal structure for organizing a business as a separate legal entity, distinct from its owners, with its own rights and liabilities.

Advantages

The positive aspects or benefits associated with a decision, strategy, or action.

Franchise

A business model where a franchisee obtains the rights to operate a business under the franchisor's brand and system in exchange for a fee.

Foreign Firm

A company that is based in one country but operates or has offices in other countries.