The Figure Given Below Shows Three Short Run Average Total

question 51

Multiple Choice

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3

-Which of the following statements is true?

• A)When long-run average total costs are increasing, the firm enjoys economies of scale.
• B)Most industries exhibit long-run average costs that are shaped like an upside-down U.
• C)Constant returns to scale occur when the short-run average-total-cost curve is horizontal.
• D)When long-run average total costs are increasing, the firm has diseconomies of scale.
• E)Constant returns to scale are never present in the real world.

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Definitions:

Ordinal Scale

A ranking scale in which data can be ordered but the intervals between values are not known or are not meaningful.

Frequency Distribution

The representation, either in a graph or table form, of how often each value occurs in a set of data.

Sample

A subset of individuals from a larger population, selected to represent the population in a study.

Frequency Distribution

A frequency distribution is a summary table that shows the frequency or count of each possible value in a dataset, typically used to observe the distribution patterns.