Author Question: If long-run average costs are falling, then the firm is experiencing diseconomies of scale. ... (Read 85 times)

mspears3 · **on:** Jun 30, 2018

If long-run average costs are falling, then the firm is experiencing diseconomies of scale.
Indicate whether the statement is true or false

Question 2

Is wage discrimination more likely or less likely in competitive markets?

srodz · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

False

Answer to Question 2

Competitive firms that discriminate may have to pay a higher wage than firms that do not discriminate. Since their costs are higher, they will have difficulty surviving in the long run in a highly competitive market. Other firms, which hire lower cost labor, will be able to undercut the output prices of wage-discriminating firms.