Asked by Caden Coulson on Jul 13, 2024
Verified
Refer to Table 13-13. Firm C is experiencing economies of scale.
Long-run Total Costs
The total costs incurred by a firm when all inputs are variable and can be adjusted.
Economies of Scale
Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.
- Absorb the essentials and implications entailed by economies of scale and diseconomies of scale.
- Identify conditions under which a firm experiences economies of scale, constant returns to scale, and diseconomies of scale based on total cost patterns.
Verified Answer
LO
Luisa OlivaJul 18, 2024
Final Answer :
False
Explanation :
Firm C is experiencing diseconomies of scale, as its long-run total costs increase more than proportionally with output.
Learning Objectives
- Absorb the essentials and implications entailed by economies of scale and diseconomies of scale.
- Identify conditions under which a firm experiences economies of scale, constant returns to scale, and diseconomies of scale based on total cost patterns.
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