Economies of scale can result from A) management problems that occur at high out

Question

Economies of scale can result from A) management problems that occur at high output levels. B) increases in long run average total cost at low output levels. C) increased specialization D) increases in long run average total cost at high output levels

If a perfectly competitive firm is making positive economic profits, then A) it is operating in the short run. B) it is producing at its minimum average variable cost. C) it is producing at its minimum average total cost. D) it is operating in the long run.

For a monopolistically competitive firm, in long run equilibrium A) P > MR > MC B) P = MR = MC C) P < MR = MC D) P > MR = MC

Explanation / Answer

1. C) increased specialization

Under economies of scale, ATC decreases as ouput level increases. This shows specialization in the production.

2. A) it is operating in the short run.

3. D) P > MR = MC

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