If Long-Run Average Total Cost Decreases as the Quantity of Output

question 38

Multiple Choice

If long-run average total cost decreases as the quantity of output increases, the firm is experiencing

• A)economies of scale.
• B)diseconomies of scale.
• C)coordination problems arising from the large size of the firm.
• D)fixed costs greatly exceeding variable costs.

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Definitions:

Controllable Factors

Elements or conditions that can be managed or influenced by individual actions or decisions in various contexts, often in pursuit of a desired outcome.

Attribution Theory

A social psychology theory focused on how individuals interpret and assign causes to their own and others' behaviors.

Actor-observer Bias

The tendency to attribute one's own actions to external causes while attributing others' actions to internal characteristics.

Self-serving Bias

The common human tendency to attribute positive events to one's own character but attribute negative events to external factors.