In the Long Run the Local Coffee Shop Incurs Total

question 503

Multiple Choice

In the long run the local coffee shop incurs total costs of $625 when output is 1,250 cups of coffee and $750 when output is 1,500 cups of coffee. For this range of output, the coffee shop exhibits

• A)economies of scale.
• B)constant returns to scale.
• C)diseconomies of scale.
• D)efficient scale.

---

Definitions:

Fee

A payment made to a professional person or to a professional or public body in exchange for advice or services.

Standard

An established measure or model that is used for comparison in evaluating the quality, performance, or compliance of various entities.

Externality

Action by either a producer or a consumer which affects other producers or consumers, but is not accounted for in the market price.

Weed Control

The process or methods used to prevent or reduce unwanted plant (weed) growth that competes with desired plants in agricultural or horticultural operations.