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If a firm enlarges its factory size and realizes higher average costs of production then:
A) it has experienced economies of scale.
B) it has experienced diseconomies of scale.
C) it has experienced constant returns to scale.
D) the long-run average cost curve slopes downward.
E) the long-run average cost curve shifts upward.

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Sonal Bahl
Sonal BahlLv10
11 Oct 2020

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Related questions

The long-run average cost curve will be upward sloping when the firm is experiencing:

A. Diseconomies of scale.

B. Economies of scale.

C. Constant returns to scale.

D. Diminishing returns.

 

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.

A firm scaled up its operation by increasing all inputs by 100%. If the firm experienced a 150% increase in the output, the firm's long-run average cost exhibits:

A) economies of scale at the current output level.
B) diseconomies of scale at the current output level.
C) a constant long-run average cost at the current output level.
D) diminishing marginal returns at the current output level.

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