The Manager of HDG Computers Reports That If Output Expands

question 33

Multiple Choice

The manager of HDG Computers reports that if output expands in the long run then average costs will rise.This is an example of

• A) economies of scale.
• B) diseconomies of scale.
• C) minimum efficient scale.
• D) constant returns to scale.

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Definitions:

Demand Schedule

A table or graph that shows the quantity of a good or service that consumers wish to buy at each price level.

Marginal Product

The additional output that is generated by employing one more unit of a specific factor of production, keeping other inputs constant.

Marginal Revenue Product

The additional revenue generated from using one more unit of a factor of production, holding other factors constant.

Marginal Resource Cost

The additional cost incurred by acquiring one more unit of a resource, such as labor or raw materials.