The Assumption of a Fixed Number of Firms Is Appropriate

question 278

Multiple Choice

The assumption of a fixed number of firms is appropriate for analysis of

• A)the short run but not the long run.
• B)the long run but not the short run.
• C)both the short run and the long run.
• D)neither the short run nor the long run.

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Definitions:

Diseconomies of Scale

occur when a company or production process becomes less efficient as it scales up, leading to increased average costs per unit.

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-term average cost, allowing it to be competitively viable.

3-D Printers

3-D printers are machines that create three-dimensional objects by adding material layer by layer, based on digital models.

Third Industrial Revolution

The period characterized by the digital revolution and the use of electronics and information technology to automate production.