The Figure Given Below Shows Three Short Run Average Total

question 51

Multiple Choice

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3

-Which of the following statements is true?

• A)When long-run average total costs are increasing, the firm enjoys economies of scale.
• B)Most industries exhibit long-run average costs that are shaped like an upside-down U.
• C)Constant returns to scale occur when the short-run average-total-cost curve is horizontal.
• D)When long-run average total costs are increasing, the firm has diseconomies of scale.
• E)Constant returns to scale are never present in the real world.

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Definitions:

Population Standard Deviation

A measure of the dispersion of a set of data from its mean, calculated for the entire population.

Confidence Interval

A statistical range, with a given probability, that contains the true parameter of the population.

Mean

The mean is the average of a set of numerical values, calculated by summing all the values and dividing by the count of the values.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values from the mean.