When there are economies of scale, a. per-unit costs increase as ...

[LaDunn]

When there are economies of scale,
 a. per-unit costs increase as output increases
  b. per-unit costs decrease as output increases
  c. per-unit costs are constant as output increases
  d. output does not affect per-unit costs

Question 2

A linear demand for lake front cabins on a nearby lake is estimated to be: QD = 900,000 - 2P. What is the point price elasticity for lake front cabins at a price of P = 300,000? HINT: Ep = (Q/P)(P/Q)
 a. EP = -3.0
  b. EP = -2.0
  c. EP = -1.0
  d. EP = -0.5
  e. EP = 0

[mariahkathleeen]

Answer to Question 1

b

Answer to Question 2

b