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

question 82

Multiple Choice

Assume that you observe the long-run average cost curve of ACME 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 behavior 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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Definitions:

Focus Strategy

A competitive approach where a business targets a specific niche market, emphasizing a singular product or service to gain a competitive edge.

Differentiation

The process of distinguishing or separating items or individuals based on specific characteristics or criteria.

Cost Leadership

A strategic approach where a company aims to become the lowest cost producer in its industry, offering its products or services at a lower price than its competitors.

Corporate Level

Refers to the highest level of strategic decision-making, concerning the overall direction of the entire organization.