When a Firm Manufactures 2,000-3,000 Units of a Product, It

question 80

Multiple Choice

When a firm manufactures 2,000-3,000 units of a product, it incurs an average cost of $10 per unit.When it manufactures 3,000-4,000 units of the same product, the average cost per unit reduces to $7.However, manufacturing beyond 4,000 units will raise the average cost per unit to $9.Which of the following is the firm's minimum efficient scale?

• A) 2,000-3,000 units
• B) 3,000-4,000 units
• C) Below 2,000 units
• D) Above 4,000 units

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Definitions:

Cognitive Psychology

The school of psychology that sees humans as active participants in their environment; studies mental processes such as memory, problem solving, reasoning, decision making, perception, language, and other forms of cognition.

Evolutionary Biology

is the study of the origins and variations of organisms, as well as the processes of natural selection and evolution.

Neuroscience

An interdisciplinary field that combines the work of psychologists, biologists, biochemists, medical researchers, and others in the study of the structure and function of the nervous system.

Information-Processing

A cognitive approach that describes how the mind operates in terms of receiving, storing, and retrieving information.