As output increases, eventually_______ a) Economies of scale become larger than

Question

As output increases, eventually_______
a) Economies of scale become larger than diseconomies of scale
b) Diseconomies of scale become larger than economies of scale
c) Economies of scale and diseconomies of scale both increase
d) Economies of scale and diseconomies of scale both decrease

The marginal cost curve intersects_____ at its/their minimum point(s)
a) The ATC, but not the AVC
b) The AVC, but not the ATC
c) Both the ATC and the AVC
d) Neither the ATC nor the AVC

Statement 1: AVC can never be higher than ATC
Statement 2: AVC and marginal cost are equal at an out of one _____
a) Statement 1 is true, and statement 2 is false
b) Statement 2 is true, and statement 1 is false
c) Both statements are true
d) Both statements are false

Explanation / Answer

c) Economies of scale and diseconomies of scale both increase b) The AVC, but not the ATC c) Both statements are true

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