If a Firm Decreases Its Plant Size and Finds That

question 98

Multiple Choice

If a firm decreases its plant size and finds that its long-run average costs have decreased, then

• A)its labor is more productive in a smaller plant.
• B)its diseconomies of scale are less.
• C)the firm should reduce its plant size even more.
• D)the firm is now profitable.

Analyze the operational and managerial challenges leading to diseconomies of scale.

Explain the significance of technological advancements on production costs.

Identify conditions under which a natural monopoly occurs and the role of learning in cost reduction over time.

Understand the components and relevance of intelligence tests, including their reliability, predictive validity, and cultural bias.

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Definitions:

Binding Awards

Decisions made by an arbitrator or judicial body that are legally enforceable and must be adhered to by the parties involved.

Restraint Of Trade

Agreement between firms to fix prices, injure competition, or prevent others from entering a market.

Exclusive Bargaining Representative

A labor union that has the sole authority to negotiate the terms of employment on behalf of all employees in a specific workplace.

Trade Union

An organization formed by workers in related sectors to protect their rights, negotiate wages, and improve working conditions.