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Under What Circumstance Might Advertising Lead to a Reduction in the Average

Question 58

Multiple Choice

Under what circumstance might advertising lead to a reduction in the average cost of production?


A) If there are significant increasing returns to scale in production.
B) If demand was fairly elastic before the advertising.
C) If marginal cost falls as a result of decreased production.
D) If demand increases and there are constant returns to scale.

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