The Figure Given Below Shows Three Short Run Average Total

question 7

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

-In the electricity generation industry, the cost per kilowatt hour of electricity declines as the capacity to generate output increases. This situation represents:

• A)a poor opportunity for investors.
• B)constant returns to scale.
• C)diseconomies of scale.
• D)economies of scale.
• E)decreasing returns to scale.

---

Definitions:

Received

To have taken possession or delivery of an item, payment, or communication.

Equivalent

Items or quantities having the same value, function, or meaning, often used in comparisons.

Annually Compounded Rate

The interest rate calculated once per year, taking into account the effect of compounding over that period.

Bank Balance

The total amount of funds in a bank account at a given moment.