Suppose That a Firm,operating Efficiently,doubles the Size of Its Operations

question 65

Multiple Choice

Suppose that a firm,operating efficiently,doubles the size of its operations and discovers that,as a result,its average cost of production has fallen.What does this imply?

• A)Decreasing returns to scale are present.
• B)Increasing returns to scale are present.
• C)Constant returns to scale are present.
• D)No conclusion about returns to scale can be made.

Assess the competitive nature of markets using different tools and indices.

Understand the concept and characteristics of a positive sum game.

Grasp the significance of the concentration ratio and Herfindahl index in analyzing market structures.

Apply knowledge of economics to evaluate the competitive dynamics of the Internet search industry.

---

Definitions:

Adrenal Glands

Endocrine glands located above the kidneys that produce a variety of hormones including adrenaline and cortisol.

Epinephrine

A hormone and neurotransmitter also known as adrenaline, released during stress and excitement, increasing heart rate, muscle strength, blood pressure, and sugar metabolism.

Norepinephrine

A neurotransmitter involved in the body's response to stress, increasing heart rate and blood pressure among other functions.

Spillover Effect

A phenomenon where emotions or behaviors from one situation influence or 'spillover' into another situation.