Table 12-14 Listed in the Table Are the Long-Run Total Costs for Costs

question 132

Multiple Choice

Table 12-14
Listed in the table are the long-run total costs for three different firms.

-Refer to Table 12-14.Which firm is experiencing constant returns to scale?

• A) Firm A only
• B) Firm B only
• C) Firm C only
• D) Firm A and Firm B only

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Definitions:

Potential Output

The maximum level of economic productivity that can be maintained in the long run without causing inflation to rise.

Governmental Intervention

Actions taken by a government to affect the economy, which can include regulations, subsidies, and taxes.

Discretionary Policy

Economic policies based on judgment decisions by policymakers, as opposed to rules-based policies, to manage the economy.

Policy Tools

Policy tools are mechanisms used by government or monetary authorities to influence the economy, such as interest rates, taxation, and government spending.