If DuPont Runs Advertisements Encouraging People to Buy Clothing That

question 48

True/False

If DuPont runs advertisements encouraging people to buy clothing that contains Lycra (a DuPont product),this would be an attempt to influence secondary demand.

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Definitions:

Constant Returns to Scale

A situation in production where increasing the inputs exactly proportionally results in an equivalent increase in output.

Economies of Scale

The financial benefits gained by businesses as a result of their operation size, wherein the expense for each unit produced typically drops as the scale expands.

Average Total Costs

The total cost of production divided by the quantity of output produced; it includes both fixed and variable costs.

Economies of Scale

Refers to the cost advantage that arises with increased output of a product, where the average cost per unit decreases as production scales up.