Assume That You Observe the Long-Run Average Cost Curve of a Local

question 241

Multiple Choice

Assume that you observe the long-run average cost curve of a local Bookstores, a national chain. Starting from the point on the curve where output is zero and moving to the right, which of the following lists the behaviour of long-run average costs in the correct sequence (that is, which will be observed first, second, etc.) ?

• A) minimum efficient scale; economies of scale; constant returns to scale; diseconomies of scale
• B) economies of scale; constant returns to scale; diseconomies of scale; minimum efficient scale
• C) constant returns to scale; economies of scale; minimum efficient scale; diseconomies of scale
• D) economies of scale; minimum efficient scale; constant returns to scale; diseconomies of scale

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