(Figure: Long-Run Average Cost) Output per period in the region from 0 to
indicates that a firm is experiencing:A) decreasing returns to scale.B) constant returns to scale.C) increasing returns to scale.D) negative costs of production.8.
Diminishing marginal returns occur when:A) each additional unit of a variable factor adds more to total output than the previous unit.B) an additional variable factor adds less to total output than the previous unit.C) the marginal product of a variable factor is increasing, but at a decreasing rate.D) total product decreases.9.
When an increase in the firm's output reduces its long-run average total cost, it experiences:A) economies of scale.B) diseconomies of scale.C) constant returns to scale.D) variable returns to scale.10.
The total cost curve for a snowmobile dealership shows how ________ cost depends on the quantity of ________.A) total; fixed inputsB) average; variableC) total; outputD) marginal; output11.
The slope of a long-run average total cost curve exhibiting decreasing returns to scale is:A) zero.B) infinite.C) positive.D) negative.12.
If Marie Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be:A) equal to
B) decreasing.C) increasing.D) constant.13.
Marginal cost ________ over the range of increasing marginal returns and ________ over the range of diminishingmarginal returns.A) increases; fallsB) falls; increasesC) is constant; risesD) increases; is constant