Economies to Scale Are Illustrated by

question 310

Multiple Choice

Economies to scale are illustrated by

• A) a downward sloping long-run average cost curve.
• B) a horizontal long-run average cost curve.
• C) an upward sloping long-run average cost curve.
• D) a long-run average cost curve that is shaped like an upside down U.

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Definitions:

Toll Road

A public or private roadway for which a fee is assessed for passage, commonly used to fund road maintenance or construction projects.

Fine

A monetary penalty imposed by a government or legal authority as punishment for breaking a law or regulation.

Risk-Averse

A preference for guaranteed outcomes over gambles, even if the gamble might have a higher expected return due to the dislike of uncertainty.

Risk-Neutral

An attitude towards risk wherein the decision-maker is indifferent between different alternatives with the same expected return, disregarding the level of risk associated with each.