Which of the Following Statements Is True? Other Things Equal

question 20

Multiple Choice

Which of the following statements is true? Other things equal, the demand for labor will be less elastic the

• A)easier it is to substitute capital for labor.
• B)greater the elasticity of resource supply.
• C)greater the elasticity of product demand.
• D)smaller the ratio of labor costs to total costs.

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Definitions:

Economies of Scale

Refers to the cost advantage that arises with increased output of a product, where the average cost per unit decreases as production scales up.

Diseconomies of Scale

The phenomenon where a company's production costs increase as it produces more, resulting in a decrease in efficiency.

Output Units

Quantitative measures of production, representing the number of units of goods or services produced.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.