If the Typical Firm in an Industry Is Experiencing Economies

question 49

Multiple Choice

If the typical firm in an industry is experiencing economies of scale,

• A)short-run equilibrium cannot exist.
• B)some firms exit the industry.
• C)industry expansion occurs.
• D)long-run equilibrium is achieved.
• E)firms need to divest and become smaller.

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Definitions:

Discounted Cash Flow

A financial analysis technique that estimates the value of an investment based on its expected future cash flows, discounted back to their present value.

Future Cash Flows

Estimated monetary gains or expenditures that a company expects to receive or pay out in the future.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal installments.

Mutually Exclusive

A statistical term describing two or more events that cannot occur simultaneously.