Author Question: Assuming the existence of economies of scale, if a firm finds that it can reduce its unit cost by ... (Read 117 times)

ETearle · **on:** Jul 1, 2018

Assuming the existence of economies of scale, if a firm finds that it can reduce its unit cost by decreasing its scale of production, it means that

A) it has too much production capacity relative to its demand.
B) it should try to produce less.
C) the law of diminishing returns has not taken effect.
D) it has too much fixed overhead relative to its variable cost.

Question 2

The increase in redistributive programs as a percentage of the government's budget has led to _____.

a. a greater potential payoff for special interests
b. a welfare bureaucracy dependent upon the existence of the redistributive program
c. a concomitant rise in private charity
d. a and b
e. b and c