Suppose a Firm's Total Cost Curve Can Be Written TC(Q)

question 35

Multiple Choice

Suppose a firm's total cost curve can be written TC(Q) = Q - .5Q² + Q³, with marginal cost MC(Q) = 1 - Q + 3Q². This cost function exhibits:

• A) economies of scale
• B) diseconomies of scale
• C) neither diseconomies nor economies of scale.
• D) economies of scale for output levels less than some level, Q₁ = 1/4, and diseconomies of scale thereafter.

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Definitions:

Learning

The method of obtaining new, or changing current, knowledge, behaviors, skills, values, or preferences.

Operant Behavior

Behavior that is controlled by its consequences, including rewards and punishments, in the context of learning.

Complaining

The expression of dissatisfaction or annoyance about something.

Blinking

A rapid closing and opening of the eyelid, which is an involuntary reflex to protect the eye from irritants and distribute tear fluid.