Economies of Scale Means That

question 13

Multiple Choice

Economies of scale means that

• A) the average fixed cost curve slopes downward over its entire range.
• B) the four-firm concentration ratio is below 80.
• C) the long-run average total cost curve slopes downward over it entire range.
• D) the long-run total cost curve slopes downward over it entire range.

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Definitions:

Equilibrium

The condition that exists when quantity supplied and quantity demanded are equal. At equilibrium, there is no tendency for price to change.

Incentive

A factor, often financial, that motivates individuals or organizations to perform certain actions or behave in a desired way.

Long Run

A period in economics sufficient for all adjustments to be made, including physical capital and not just prices.

Licenses

Official permits to own or do something, typically issued by a government authority.