Q11. The upward sloping segment of a long-run average total cost curve represents the existence of:

A)   economies of scale.

B)   diseconomies of scale.

C)   efficiencies of scale.

Q12. Which of the following most accurately describes economies of scale? Economies of scale:

A)   occur when long-run unit costs fall as output increases.

B)   increase at a decreasing rate.

C)   are dependent on short-run average costs.

Q13. Which of the following most accurately describes the relationship between the slope of a firm’s long-run average total cost (LRATC) curve and scale economies?

    Downward sloping           Upward sloping
segment of LRATC                    segment of LRATC

A) Economies of scale                 Diseconomies of scale

B) Diseconomies of scale           Economies of scale

C) Economies of scale                Economies of scale