Which of the Following Situations Does a Firm Have When

question 65

Multiple Choice

Which of the following situations does a firm have when long-run average total cost decreases as the quantity of output increases

• A)economies of scale
• B)diseconomies of scale
• C)coordination problems arising from the large size of the firm
• D)fixed costs greatly exceeding variable costs

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Definitions:

Open Market

A system where goods, services, and financial instruments are traded freely without restrictions, based on supply and demand forces.

Foreign Competitors

Companies based in one country that compete with those in another country, often affecting market share, pricing strategies, and innovation efforts.

External Environment

The external forces that affect an organization's performance, including economic, technological, socio-cultural, and political factors.

Economic Conditions

Refers to the current state of the economy, characterized by factors like unemployment rates, inflation levels, and GDP growth.