Use the Following to Answer Question(s): Long-Run Average Cost

question 166

Multiple Choice

Use the following to answer question(s) : Long-Run Average Cost

-(Exhibit: Long-Run Average Cost) Output per period in the region B to C indicates that a firm is experiencing:

• A) constant returns to scale.
• B) diseconomies of scale.
• C) economies of scale.
• D) falling marginal cost.

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Definitions:

Bundle

A combination of goods or services that are sold or consumed together.

Revealed Preferred

Another term for revealed preference, emphasizing the process of deducing preferences by observing actual choices under constraints.

Violates WARP

Deviating from the Weak Axiom of Revealed Preference, indicating inconsistencies in consumer choice under the assumption of rational behavior.

Bundle

A combination of goods or services sold together as a single package, often for a price lower than the sum of their individual costs.