Answer:
Economists do not assume that consumers and firms always make correct decisions, instead they assume that consumers and firms make rational decisions
Explanation:
This assumption that firms and consumers make rational decision is based on the economic rationality principle. The principle theorizes that people will usually consider actions, decisions and options based on logical thinking rather than other subjective elements such as morals, psychology and emotion. As a result of this principle economists assume that people will always make rational decisions.
The meaning of this is that consumers and firms would usually weigh the pros and cons of an issue before taking a decision and as described in the correct statement, rational decisions are logical decisions they do not necessarily mean they are correct decisions.
A consumer can make a logical decision to buy a product based on information made available but this may be a wrong decision because the information is misleading or wrong. It is a logical but incorrect decision.
Answer:
C. blogs
Explanation:
Personalized online journals where people and organizations can keep a running dialogue such as the one illustrated here are known as blogs
It results in lower short run average cost in economies of sale .
<h3>Economies of scale</h3>
Economies of scale refers to the situation where, as the quantity of output goes up, the cost per unit goes down. This is the idea behind “warehouse stores” like Costco or Walmart. In everyday language: a larger factory can produce at a lower average cost than a smaller factory. Figure 2 illustrates the idea of economies of scale, showing the average cost of producing an alarm clock falling as the quantity of output rises. For a small-sized factory like S, with an output level of 1,000, the average cost of production is $12 per alarm clock. For a medium-sized factory like M, with an output level of 2,000, the average cost of production falls to $8 per alarm clock. For a large factory like L, with an output of 5,000, the average cost of production declines still further to $4 per alarm clock.
One prominent example of economies of scale occurs in the chemical industry. Chemical plants have a lot of pipes. The cost of the materials for producing a pipe is related to the circumference of the pipe and its length. However, the volume of chemicals that can flow through a pipe is determined by the cross-section area of the pipe.
Learn more about economies of scale here :
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