If your long-run costs exhibit increasing returns to scale, securing big orders leads you to
a. Increase average costs
b. Reduce average costs
c. Keep the average costs constant
d. None of the above
Question 2
Jim is haggling with a car dealer on the price of a used car. During the bargaining, the storekeeper discovers that the car's stereo is better than he or Jim originally realized. If Jim is a huge music fan, the total surplus available from the sale
a. Increases
b. Decreases
c. Is not affected
d. All of the above
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