Suppose Toyota produces 100,000 cars per year at its California plant at an average cost of 6,000 and it doubles output and total costs by building an identical plant in Kentucky. Toyota has exhibited
a. diminishing marginal returns
b. economies of scale
c. constant average costs
d. an upward-sloping planning curve
e. production inefficiency
Question 2
Diseconomies of scale are pictured on a graph by the upward-sloping portion of the
a. marginal product curve
b. short-run marginal cost curve
c. long-run marginal cost curve
d. short-run average cost curve
e. long-run average cost curve
