Related to the Economics in Practice on page 198: If firms have long-run average cost curves with a long, flat section
A) their long run supply curves are downward sloping.
B) the optimal number of firms in the industry is one.
C) larger firms have a cost advantage over smaller firms.
D) it is impossible to predict the size of the firm.

Question

Quizplus · Accepted Answer

A long, flat section of the long-run average cost curve indicates that there are substantial economies of scale over a wide range of output levels. This means that firms can produce at a relatively constant average cost, making it difficult to predict the optimal size of the firm based solely on cost considerations.

Related to the Economics in Practice on Page 198: If