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Rudiy27
3 years ago
8

When the firm increases output and the costs rise disproportionately​ slower, then the longminusrun average cost curve is​ _____

___ and the firm is experiencing​ ________.
A. downward​ sloping; economies of scale
B. upward​ sloping; diseconomies of scale
C. downward​ sloping; constant returns to scale
D. ​horizontal; constant returns to scale

Business
1 answer:
Stella [2.4K]3 years ago
3 0

Answer:

A. Downward sloping; economies of scale

Explanation:

As the costs rise slower than quantity produced, the cost for each additional unit produced (marginal cost) is decreasing. That is when the Average Cost curve is downward sloping.

At that point the more products are made (scales of production) the lower unit cost becomes (more economic), which means economies of scale.

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In this scenario, the par value is $8 per share which means that Globule Inc. cannot issue this share for less than $8. Kirby in paying only $6, is still liable for $2 so that he can at least pay for the stock at its par value.

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3 years ago
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3 years ago
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