If Economies of Scale Are Relatively Unimportant in an Industry

question 8

Multiple Choice

If economies of scale are relatively unimportant in an industry, the typical firm's long-run average total cost curve will reach a minimum at a level of output that is a ________ fraction of total industry sales.The industry will be ________.

• A)large; competitive
• B)large; an oligopoly
• C)small; competitive
• D)small; an oligopoly

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Definitions:

6-Sigma Standards

A set of techniques and tools for process improvement, aiming at reducing defects and variability in manufacturing and business processes to improve quality.

Automated Tolerance-Check

A computerized process for verifying if manufactured parts fall within specified tolerance levels.

Breakdown Cost

The costs associated with analyzing and fixing a problem within a system or process.

Series Connection

An electrical circuit configuration where components are connected end-to-end in a single path for current to flow.