Some Firms Eventually Experience Problems with Their Capacity to Produce

question 15

Multiple Choice

Some firms eventually experience problems with their capacity to produce output as their output levels increase.For these firms,

• A)market power is substantial.
• B)supply is perfectly inelastic.
• C)supply is more elastic at low levels of output and less elastic at high levels of output.
• D)supply is less elastic at low levels of output and more elastic at high levels of output.

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Definitions:

Industrial Machinery

Machines and equipment designed and used in the manufacturing and production sector.

Factor Of Production

Resources utilized in the creation of goods and services, including land, labor, capital, and entrepreneurship.

Constant Returns To Scale

a condition in production where increasing the inputs by some proportion leads to an increase in output by the same proportion.

Physical Capital

Physical assets including facilities, tools, and machines utilized for manufacturing products and providing services.