In the Long Run,decreasing Returns to Scale Are Likely to Be

question 3

Multiple Choice

In the long run,decreasing returns to scale are likely to be caused by

• A)diseconomies of scale associated with management problems.
• B)a decrease in factor prices.
• C)increasing specialization of labour.
• D)diminishing returns to the variable factor.
• E)decreasing costs.

---

Definitions:

Lowest Price

The minimum cost at which a product or service is offered in the market.

Soft Drink Market

The industry and marketplace that revolves around the production, distribution, and sale of non-alcoholic, carbonated beverages.

Fizzy Drinks Inc.

A fictional or specific company name, presumably involved in the production or distribution of carbonated beverages.

Price Skimming Strategy

A price skimming strategy involves setting high prices initially and then gradually lowering them to attract more price-sensitive customers.