Economies of Scale Occur Where

question 159

Multiple Choice

Economies of scale occur where

• A)long-run average cost falls as new firms enter the industry
• B)short-run average cost falls as new firms enter the industry
• C)long-run average cost falls as one firm expands plant size
• D)short-run average cost falls as one firm expands plant size
• E)long-run average cost rises as one firm expands plant size

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Definitions:

World Price

The worldwide market value of a product or service, established by the universal demand and supply.

Trade Restrictions

Measures imposed by governments to control the flow of goods and services across borders, including tariffs, quotas, and import bans, often with the aim of protecting domestic industries.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a specific price over a defined period of time.

Producer Surplus

The difference between what producers are willing to accept for a good or service and what they actually receive, due to higher market prices.