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Economics
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The long-run average total cost curve is always:

a. Flatter than the short-run average total cost curve, but not necessarily horizontal

b. Horizontal

c. Falling as output increases

d. Rising as output increases.

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Kritika Krishnakumar
Kritika KrishnakumarLv10
9 Nov 2020
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Related questions

36) A firm encountering economies of scale over some range of output will have a:

a) rising long-run average cost curve.

b) falling long-run average cost curve.

c) constant long-run average cost curve.

d) rising, then falling, then rising long-run average cost curve.

37) When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) a violation of the law of diminishing returns.

38) The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of:

a) economies of scale.

b) normative economies.

c) diminishing marginal returns.

d) an increasing marginal product of labor.

39) If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) increasing the average total costs.

40) Economies and diseconomies of scale explain why the:

a) short-run average fixed cost curve declines so long as output increases.

b) marginal cost curve must intersect the minimum point of the firm's average total cost curve.

c) long-run average total cost curve is typically U-shaped.

d) short-run average variable cost curve is U-shaped.

Once diminishing returns have set in, as output increases, the total cost curve:

A. increases at first and then decreases.

B. gets flatter.

C. becomes horizontal.

D. gets steeper.

7) Economies of scale are present when A) the LRAC curve is horizontal. B) total fixed cost increases. C) the LRAC curve slopes downward. D) average total cost rises as output increases. E) average total cost remains constant as input increases.

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