Asked by Nicole Schutkin on Jun 28, 2024
Verified
The cost-output elasticity is used to measure:
A) input substitution flexibility.
B) the slope of the firm's expansion path.
C) the slope of long-run average cost.
D) the slope of long-run marginal cost.
E) economies of scale.
Cost-output Elasticity
Cost-output elasticity measures the responsiveness of the cost of production to changes in the quantity of output produced, indicating the scale economies in production.
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.
Marginal Cost
The expenditure required to produce an additional unit of a product.
- Comprehend the principle and quantification of cost-output elasticity.
Verified Answer
FA
Fahad AlotaibiJul 01, 2024
Final Answer :
E
Explanation :
Cost-output elasticity measures economies of scale, indicating how costs change in response to changes in output.
Learning Objectives
- Comprehend the principle and quantification of cost-output elasticity.