In the Long Run a Company That Produces and Sells

question 364

Multiple Choice

In the long run a company that produces and sells dog beds incurs total costs of $1,200 when output is 30 beds and $1,600 when output is 40 beds. 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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