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- Subject
- Costs , Supply And Perfect Competitioneconomics-mcqs › costs-supply-and-perfect-competition
- Published
- 2 Jun 2019
- Last updated
- 28 May 2026
Explanation
A downward-sloping long-run average cost curve signifies increasing returns to scale, meaning that as production expands, average costs decrease. Conversely, decreasing returns to scale would cause the curve to slope upward, constant returns to scale would result in a flat curve, and the minimum efficient scale refers to the lowest output level at which long-run average costs are minimized.
More Costs , Supply And Perfect Competition MCQs
Practice related questions from the same subject.
- 1.In the context of a perfectly competitive firm, what represents its short-run supply curve and its long-run supply curve respectively?
- 2.Under what condition will a firm cease production and produce nothing in the short term?
- 3.In the short run, the average total cost is composed of which two components?
- 4.What is the relationship between marginal cost and average cost when the average cost is decreasing and when it is increasing?
- 5.Which characteristic best describes a monopoly market structure?
- 6.According to Porter's Five Forces framework, what is the likely impact on supplier power when a company acquires one of its competitors?
- 7.In a monopolistic competition market, when firms earn abnormal profits, what is the expected effect on marginal cost as new firms enter the industry?
- 8.Identify the option that is not included in the traditional four Ps of marketing.
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