A firm may decide to increase its scale so that it has excess production capacity because, by doing so, it is able to

Related MCQs

• If there is excess capacity in a production facility, it is likely that the firm’s supply curve is:
• A firm that is threatened by the potential entry of competitors into a market builds excess production capacity. This is an example of
• When a firm doubles its inputs and finds that its output has more than doubled, this is known as:
• A firm encountering economies of scale over some range of output will have a:
• With fixed costs of Rs.400, a firm has average total costs of Rs.3 and average variable costs of Rs.2.50. Its output is:
• In game theory, a situation in which one firm can gain only what another firm loses is called a
• If the short-run average variable costs of production for a firm are rising, then this indicates that:
• The reason the marginal cost curve eventually increases as output increases for the typical firm is because:
• A firm that considers the potential reactions of its competitors when it makes a decision
• In game theory, a choice that is optimal for a firm no matter what its competitors do is referred to as