A Firm Scaled Down Its Operation by Reducing All Inputs

question 184

Multiple Choice

A firm scaled down its operation by reducing all inputs by 50% and experienced a more-than-50% decrease in output. If all input prices remain unchanged, the firm's long-run average cost exhibits

• A) economies of scale at the current output level.
• B) diseconomies of scale at the current output level.
• C) a constant long-run average cost at the current output level.
• D) diminishing marginal returns at the current output level.

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Definitions:

Body Map

A representation within the brain of the body's parts and their relative positions; it is involved in processing sensory information and coordinating movement.

Phantom Limb Pain

A phenomenon where individuals experience sensations, often pain, in a limb or part of a limb that has been amputated.

Basic Skin Sensations

The four types of sensations that can be felt by the skin: pressure, warmth, cold, and pain.

Warmth

The quality, state, or sensation of being warm; often used metaphorically to describe a kind, friendly, and empathetic nature.