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Steve Owns a Bike Store

Question 106

Multiple Choice

Steve owns a bike store. If he decided to expand the size of his store so that he could sell more bikes, how would he know if he is experiencing economies of scale in the long run?


A) His long-run average cost of selling each bike remains unchanged.
B) His long-run average cost of selling each bike decreases.
C) His long-run average cost of selling each bike increases.
D) His long-run total cost of selling bikes increases.
E) His long-run fixed cost of selling bikes increases.

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