Suppose That a Firm's Long-Run Average Total Costs of Producing

question 180

Multiple Choice

Suppose that a firm's long-run average total costs of producing hand-crafted chairs is $300 when it produces 10,000 chairs and $325 when it produces 11,000 chairs. For this range of output, the firm is likely experiencing

• A)economies of scale.
• B)constant returns to scale.
• C)specialization.
• D)coordination problems.

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Definitions:

Process Theories

Refer to models and concepts that explain the dynamics of how processes, such as decision-making or motivation, unfold over time within organizations.

Cognitive Processes

The mental actions or processes involved in acquiring knowledge and understanding through thought, experience, and the senses.

Lower-order Needs

Basic physiological and safety needs at the bottom levels of Maslow’s hierarchy, which must be satisfied before higher-level needs can be addressed.

Maslow

Refers to Abraham Maslow, a psychologist known for creating Maslow's hierarchy of needs, a theory in psychology that prioritizes human needs from basic to self-fulfillment.