Use the following to answer question 23 Lon Output 23. Refer to the above diagra
ID: 1105574 • Letter: U
Question
Use the following to answer question 23 Lon Output 23. Refer to the above diagram. Diseconomies of scale A) begin at output B) occur over the O1, range of output C) begin at output D) are in evidence at all output levels 24. Which o t the following is not a source of economies of scale? A) learning-by-doing B) labor specialization. C) use of larger machines D) inelastic resource supply curves. 25. A natural monopoly exists when: several formerly competing producers merge to become the only firm in an industry unit costs are minimized by having one firm produce an industry's entire output C) short-run average total cost curves are tangent to long-run average total cost curves D) minimum efficient scale is attained at a small level of output. B) PageExplanation / Answer
Answer : Diseconomics of scale begin at output Q3. At this level there is higher unit cost the firm has beared and it will reduced total profit of the firm. Diseconomics of scale means increase in unit cost supply in long run.
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Answer :Inelastic supply curve is not a source of economics of scale because it measures the responsivness of the quantity supply to change in the price of the specific goods in an economy.
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Answer : A natural monopoly exist when unit cost are minimised by having one firm produce an industry entire output. As natural monopoly arises in the industry that required different raw material and technology.
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Answer : Q1 and Q3 is the range where there is diminishing marginal returns which shows that each extra input lead to the decreasing rate of output.It is best to stop somewhere at this period of time.
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