When the Long-Run Average Cost Curve Is Downward Sloping

question 209

Multiple Choice

When the long-run average cost curve is downward sloping,

• A) economies of scale are present.
• B) diseconomies of scale are present.
• C) the firm experiences constant returns to scale.
• D) the average fixed cost curve must be upward sloping.
• E) The premise of the question is wrong because long-run average cost curves never slope downward.

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Definitions:

Sunken Stomata

Stomatal openings located below the surface level of plant epidermis, helping reduce water loss by decreasing transpiration.

Desert

A barren or desolate area, especially one with little water and sparse vegetation, typically receiving less than 25 cm of precipitation a year.

Small Leaves

Leaf adaptation that reduces surface area to minimize water loss, typically found in plants living in dry or windy environments.

Girdling

A horticultural technique in which a ring of bark from a tree or plant is removed, disrupting the flow of nutrients and sometimes used to enhance fruit production or kill the plant.