The following table provides information about long-run average cost curve of a firm: Quantity LRAC 100 50 200 43 300 39 400 39 500 44 600 52 a. For output levels between 300 and 400, the firm has constant returns to scale. b. This cost structure is an example of natural monopoly. c. For output levels greater than 400, the firm has economies of scale. d. For the first 300 units of output, this firm has diseconomies of scale.
The following table provides information about long-run average cost curve of a firm: Quantity LRAC 100 50 200 43 300 39 400 39 500 44 600 52 a. For output levels between 300 and 400, the firm has constant returns to scale. b. This cost structure is an example of natural monopoly. c. For output levels greater than 400, the firm has economies of scale. d. For the first 300 units of output, this firm has diseconomies of scale.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter8: Perfect Competition
Section: Chapter Questions
Problem 39P: The AAA Aquarium Co. sells aquariums for 20 each. Fixed costs of production are 20. The total...
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The following table provides information about long-run average cost curve of a firm:
| Quantity | LRAC |
| 100 | 50 |
| 200 | 43 |
| 300 | 39 |
| 400 | 39 |
| 500 | 44 |
| 600 | 52 |
a.
For output levels between 300 and 400, the firm has constant returns to scale.
b.
This cost structure is an example of natural
c.
For output levels greater than 400, the firm has economies of scale.
d.
For the first 300 units of output, this firm has diseconomies of scale.
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