In the Long Run Firm a Incurs Total Costs of $900

question 172

Multiple Choice

In the long run Firm A incurs total costs of $900 when output is 30 units and $1,200 when output is 40 units.Firm A exhibits

• A) diseconomies of scale because total cost is rising as output rises.
• B) constant returns to scale because average total cost is constant as output rises.
• C) diseconomies of scale because average total cost is rising as output rises.
• D) economies of scale because average total cost is falling as output rises.

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Definitions:

Total Utility

The sum satisfaction or benefit that a consumer receives from consuming a particular quantity of goods or services.

Consumer Surplus

The variance between the aggregate sum consumers are prepared and able to spend on a good or service versus what they truly pay.

Consumer Surplus

The divergence between the full amount consumers intend and are able to allocate for a good or service, and the amount they really pay.

Total Utility

The complete fulfillment derived from the consumption of a specific amount of products or services.