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An upward-sloping portion of a long-run average total cost curve is the result of economies of scale
An upward-sloping portion of a long-run average total cost curve is the result of economies of scale. True False
When a firm is operating in a price-taker market, marginal revenue is always greater than the market price. True O False
Demand will be more price inelastic, when the number of "good" substitutes available to consumers is small. True False
Over time, there has been less risk of a low or negative return on stock market investments when a portfolio of stocks has been held by investors for a greater amount of years. True False
Expert Solution
Answer option (false
In the long run economies turn into diseconomies of scale. Hence the long run average cost curve starts sloping positively. It rises. Thus, the positive sloped (i.e., rising) part of the long run average total cost curve is due to diseconomies of scale.
Part B)false
In a perfect competition in price taking we marginal revenue is equal to Market price.
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