In the Long Run a Company That Produces and Sells

question 335

Multiple Choice

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits

• A)diseconomies of scale because total cost is rising as output rises.
• B)diseconomies of scale because average total cost is rising as output rises.
• C)economies of scale because total cost is rising as output rises.
• D)economies of scale because average total cost is falling as output rises.