When Production Is Characterized by Persistently Declining Long-Run Average Costs

question 40

Multiple Choice

When production is characterized by persistently declining long-run average costs as output increases

• A) the costs of production are greater when competition exists than when a single firm produces a good.
• B) it is impossible for two firms to compete in the market.
• C) the costs are lower if a single firm exists, and even if the firm is unregulated, price will still be lower with a single firm.
• D) there is no need for the government to limit competition by licensing requirements.

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Definitions:

Foreign Investment

Investments made by individuals, companies, or governments in business interests in another country, in the form of direct investments or buying securities.

Labor Productivity Growth

The increase in the amount of goods and services produced per unit of labor over a period of time.

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The period extending from January 1, 2001, to December 31, 2100, marking the first century of the 3rd millennium.

1870s

A decade characterized by industrial, economic, and social developments, including the aftermath of the Franco-Prussian War and the beginning of the Second Industrial Revolution.