In the Long Run a Company That Produces and Sells

question 555

Multiple Choice

In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. The kayak company 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:

Endangered Species

Animal or plant species at risk of extinction due to factors like habitat destruction, pollution, or overhunting.

International Trade

The exchange of goods, services, and capital between countries and territories, influenced by international agreements, tariffs, and economic policies.

Precautionary Principle

A strategy to cope with possible risks where scientific understanding is yet incomplete, favoring preventive action in the face of uncertainty.

Non-Native Species

Species that are brought into a new habitat where they do not naturally occur, potentially causing harm to the native species and ecosystems.