Figure 3.4 -Refer to Figure 3.4.What Occurs If the Price Is $10

question 193

Multiple Choice

Figure 3.4
-Refer to Figure 3.4.What occurs if the price is $10?

• A)There would be a surplus of 600 units.
• B)There would be a shortage of 600 units.
• C)There would be a surplus of 200 units.
• D)There would be a shortage of 200 units.

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Definitions:

Diminishing Returns to Scale

A situation where, as more inputs are used, the incremental increase in output decreases.

Economies of Scale

Economies of scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.

Constant Returns to Scale

A situation in production where increasing the inputs exactly proportionally results in an equivalent increase in output.

Economies of Scale

The financial benefits gained by businesses as a result of their operation size, wherein the expense for each unit produced typically drops as the scale expands.