If an Airport Decides to Expand by Building an Additional

question 231

Multiple Choice

If an airport decides to expand by building an additional passenger terminal, and in doing so it lowers its average cost per airplane landing, it was previously operating at

• A)minimum efficient scale.
• B)more than minimum efficient scale.
• C)less than minimum efficient scale.
• D)minimum capacity.

---

Definitions:

Equilibrium Quantity

The quantity of goods or services supplied that is equal to the quantity demanded at the market equilibrium price.

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded, also known as the market-clearing price.

Equilibrium Quantity

The quantity of goods or services that are supplied and demanded at the equilibrium price, where the amount producers are willing to sell equals the amount consumers are willing to buy.

Price of Ingredients

The cost of raw materials used in the production of goods, which can impact the final price of the product and profitability of producers.