In Some Industries, Like Insurance, Both Small and Very Large

question 63

Multiple Choice

In some industries, like insurance, both small and very large firms coexist and compete quite effectively in the market. This indicates that the long-run average total cost curve in these industries

• A) is "U" shaped.
• B) is downward sloping over all levels of output.
• C) exhibits constant returns to scale over a wide range of output.
• D) exhibits diseconomies of scale beginning at a low rate of output.

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Definitions:

Hyperopia

A defect of vision so that objects can only be seen when they are far away; farsightedness.

Farsightedness

A common vision condition, also known as hyperopia, where distant objects are seen more clearly than close ones.

Tympanic Membrane

The eardrum.

Eardrum

A thin membrane that separates the outer ear from the middle ear and vibrates in response to sound waves.