When the firm's LRATC curve is downward sloping over its range of production, this implies that A. when all of the firm's inputs are increased proportionately, the firm's level of production will increase, but by a smaller factor than the O increase in the firm's inputs. B. the firm is experiencing increasing returns to scale over this range of production. C. when all of the firm's inputs are tripled, the firm's level of O production may or may not increase. D. the firm is experiencing decreasing returns to scale over this range of

When the firm's LRATC curve is downward sloping over its range of production, this implies that A. when all of the firm's inputs are increased proportionately, the firm's level of production will increase, but by a smaller factor than the O increase in the firm's inputs. B. the firm is experiencing increasing returns to scale over this range of production. C. when all of the firm's inputs are tripled, the firm's level of O production may or may not increase. D. the firm is experiencing decreasing returns to scale over this range of

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 21P

See similar textbooks

Similar questions

What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?
What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?
Return to Figure 7.7. What is the marginal gain in output from increasing the number of batters from 4 to 5 and from 5 to 6? Does it continue the pattern of diminishing marginal returns? Figure 7.7 How output Affects Total costs
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
In choosing a production technology, how will firms react if one input becomes relatively more expensive?
What is die difference between accounting and economic profit?
What is the difference between a fixed input and a variable input?
Are fixed costs also sunk costs? Explain.
How does fixed cost affect marginal cost? Why is this relationship important?
Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?