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Table 68 Elegant Settings Manufactures Stainless Steel Cutlery

Question 222

Multiple Choice

Table 6.8
 Quantity (sets)   Long Run  Average Cost  (dollars)  1004020035300304003050035\begin{array} { | c | c | } \hline \text { Quantity (sets) } & \begin{array} { c } \text { Long Run } \\\text { Average Cost } \\\text { (dollars) }\end{array} \\\hline 100 & 40 \\\hline 200 & 35 \\\hline 300 & 30 \\\hline 400 & 30 \\\hline 500 & 35 \\\hline\end{array} Elegant Settings manufactures stainless steel cutlery. Table 6.8 shows the company's cost data.
-Refer to Table 6.8.Elegant Settings experiences _________.


A) economies of scale up to an output level of 400
B) diminishing returns up to an output level of 400
C) increasing returns beyond an output level of 400
D) economies of scale at an output of 300 or less and diseconomies of scale at an output level above 400

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