Economies of Scale Refers to The

question 5

Multiple Choice

Economies of scale refers to the:

• A)fall in an FI's average costs of production as its output decreases
• B)fall in an FI's average costs of production as its output increases
• C)fall in an FI's average costs of production as its output remains stable
• D)increase in an FI's average costs of production as its output increases

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Two-part Tariff

A pricing strategy that consists of a fixed fee plus a variable usage fee, common in services like utilities.

Entry Fee

An initial charge required to gain access to a service, event, or establishment.

Tying

Practice of requiring a customer to purchase one good in order to purchase another.