If the Minimum Efficient Scale in Woodstove Production Is 200,000

question 24

Multiple Choice

If the minimum efficient scale in woodstove production is 200,000 units per year,_____

• A)the long-run average cost of producing 50,000 stoves is greater than the average cost of producing 100,000 stoves.
• B)the long-run average cost of producing 50,000 stoves is equal to the average cost of producing 100,000 stoves.
• C)the long-run total cost of producing 50,000 stoves is greater than the total cost of producing 100,000 stoves.
• D)the firm should not produce more than 200,000 woodstoves each year.
• E)the short-run marginal cost exceeds the short-run average cost at 200,000 stoves.

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Definitions:

Scarce Resources

Resources that are limited in supply, which can lead to competition for their use or access.

Economic Wants

Economic wants are desires that can be satisfied through the consumption of goods and services, which are often influenced by factors such as income, taste, and cultural trends.

Maximum Satisfaction

The highest level of satisfaction or utility achieved by a consumer through the consumption of goods and services.

Economic Principles

Fundamental theories and concepts that underpin the study of economics, guiding the analysis of economic behavior.