Which of the following statements are true? a) Internal economies of scale relate only to the long run…
Statements a, b and d are true: internal economies of scale concern expansion in the long run and help determine the long-run cost curve. Improved input productivity…
Choose your answer
Which of the following statements are true?
a) Internal economies of scale relate only to the long run
b) Internal economies of scale affect the shape of long run cost curves
c) The economies realised by a firm by paying lower prices to inputs are known as real economies
d) The economies realised by a firm due to improvement in productivity of inputs is known as real economies
Answer and explanation
Correct answer C
Statements a, b and d are true: internal economies of scale concern expansion in the long run and help determine the long-run cost curve. Improved input productivity produces real economies, whereas lower input prices produce pecuniary economies.
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Telangana SET (TG SET)