When a Firm Has an Extremely Large Output,it Will Likely

question 76

Multiple Choice

When a firm has an extremely large output,it will likely experience

• A)both economies of scale and diseconomies of scale.
• B)neither economies of scale nor diseconomies of scale.
• C)economies of scale,but not diseconomies of scale.
• D)diseconomies of scale,but not economies of scale.

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Definitions:

Long-Run Average Total Cost

The cost per unit of output incurred when all factors of production are variable, and scale of production can be changed.

Output

The amount of products or services produced by a company, industry, or economic system.

Total Fixed Cost

The sum of all costs that do not change with output level, including rent, salaries, and insurance.

Short Run

A period in economic analysis during which at least one input, such as plant size or capital, is fixed, limiting the ability to adjust to demand changes.