Which of the Following Would Contribute Most to a Firm

question 165

Multiple Choice

Which of the following would contribute most to a firm experiencing "economies of scale"?

• A)rising long-run average costs
• B)the law of diminishing marginal returns
• C)specialization of labor and management within the firm
• D)deterioration of information and control within the firm

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Definitions:

Labor Supply Curve

A graphical representation that shows the relationship between the quantity of labor willing to be provided and the wage rate.

Nonlabor Income

Income received from sources other than direct employment or work, such as investments, pensions, or transfer payments.

Substitution Effect

The change in the quantity demanded of a good as consumers switch away from more expensive alternatives.

Income Effect

The change in consumer demand for goods and services induced by a change in consumers' discretionary income.