If Economies of Scale Are Relatively Unimportant in an Industry

question 8

Multiple Choice

If economies of scale are relatively unimportant in an industry, the typical firm's long-run average total cost curve will reach a minimum at a level of output that is a ________ fraction of total industry sales.The industry will be ________.

• A)large; competitive
• B)large; an oligopoly
• C)small; competitive
• D)small; an oligopoly

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Definitions:

Decision Trap

A situation in decision-making where biases, poor information, or pressure leads to a significant or systematic error.

Framing Error

A cognitive bias in decision-making that occurs when information is presented in a way that influences an individual's interpretation or decision.

Escalation Of Commitment

This refers to the phenomenon where individuals or organizations continue to invest time, money, or resources into a failing course of action due to the substantial resources already invested, rather than altering or abandoning the course.

Problem No Longer Exists

A situation where previously identified issues have been resolved or are no longer relevant.