Assume that an industry requires a very specialized technology that involves high start-up costs for new firms no matter what level of output they produce.In the long run,at low levels of output,these firms will tend to exhibit
A)diminishing marginal returns
B)increasing marginal returns
C)diseconomies of scale
D)constant returns to scale
E)economies of scale

Question

Quizplus · Accepted Answer

In the long run, at low levels of output, firms with high start-up costs will tend to exhibit economies of scale, as the average cost per unit decreases with increased production.

Assume That an Industry Requires a Very Specialized Technology That