In the Long Run, When Marginal Cost Is Above Average

question 418

Multiple Choice

In the long run, when marginal cost is above average total cost, the average total cost curve exhibits

• A)economies of scale.
• B)diseconomies of scale.
• C)constant returns to scale.
• D)efficient scale.

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Definitions:

P(B|A)P(A)

Represents the probability of event B given event A has occurred, multiplied by the probability of event A; used in the calculation of joint probabilities.

Bayes' Law

A theorem that describes the probability of an event, based on prior knowledge of conditions that might be related to the event.

Conditional Probabilities

Probabilities of events given the occurrence of some other event.

Likelihood Probabilities

The probabilities that reflect the plausibility of different parameter values given the observed data, used in statistical inference.