Match the items of List - I with those of the List - II and indicate the correct code : List-IList-II…
Matching the production and cost concepts: (a) Excess capacity of a plant implies operating to the left of minimum AC, permitting (i) cost reduction with output expansion;…
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Match the items of List - I with those of the List - II and indicate the correct code :
| List-I | List-II |
|---|---|
| (a) Excess capacity of the plant | (i) Cost reduction with output expansion |
| (b) Resorting to New Technology | (ii) Constant cost with output expansion |
| (c) Setting up of the Training Institutions | (iii) Internal economies |
| (d) Reserve capacity of the plant | (iv) External economies |
Answer and explanation
Correct answer A
Matching the production and cost concepts: (a) Excess capacity of a plant implies operating to the left of minimum AC, permitting (i) cost reduction with output expansion; (b) Resorting to new technology by an individual firm generates (iii) Internal economies of scale; (c) Setting up industry-wide training institutions creates (iv) External economies of skilled labour; and (d) Reserve capacity built into a plant allows (ii) constant average variable cost over a normal range of output expansion.
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UGC NET Commerce