If a Company Triples Its Output and Its Average Cost

question 139

Multiple Choice

If a company triples its output and its average cost decreases,then the firm is definitely experiencing

• A) diseconomies of scale.
• B) decreasing marginal returns.
• C) increasing marginal returns.
• D) economies of scale.
• E) Both answers C and D are correct.

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Definitions:

Crutchfield Situation

A technique used in social psychology experiments to study conformity, where individuals must make judgments while being exposed to the presumed opinions of others.

Asch Situation

An experiment by Solomon Asch that demonstrated the power of conformity in groups, where individuals often agree with a consensus even if it is clearly incorrect.

Asch Experiment

A series of psychological experiments conducted by Solomon Asch studying if and how individuals yield to or defy a majority group and the effect of such influences on beliefs and opinions.

Compliance

The act of conforming to a request, command, or set of regulations; this often involves adjusting one's behavior to align with societal or organizational standards.