The following graph of long-run changes in a competitive market indicate that it is exhibitingPrice ($)1098765432100Constant returns to scale1O External diseconomies of scale2ONeither economies nor diseconomies of scaleThe law of increasing marginal returnsO Internal economies of scale of the firms3O Internal diseconomies of scale of the firms45слD651 52 537 8D₂9D310Quantity

Internal economies of scale are cost advantages that a firm can achieve through its own growth and…

The following graph of long-run changes in Price ($) 10 9 8 7 6 5 4 3 2 1 0 0 Constant returns to scale 1 2 O External diseconomies of scale ONeither economies nor diseconomies of scale O The law of increasing marginal returns O Internal economies of scale of the firms 3 O Internal diseconomies of scale of the firms 4 a competitive market indicate that it is exhibiting 5 D₁ 6 51 52 53 7 8 D₂ 9 D3 10 Quantity

The following graph of long-run changes in Price ($) 10 9 8 7 6 5 4 3 2 1 0 0 Constant returns to scale 1 2 O External diseconomies of scale ONeither economies nor diseconomies of scale O The law of increasing marginal returns O Internal economies of scale of the firms 3 O Internal diseconomies of scale of the firms 4 a competitive market indicate that it is exhibiting 5 D₁ 6 51 52 53 7 8 D₂ 9 D3 10 Quantity

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 21P

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How do transportation costs affect attaining economiesof scale in brewing? How might a large beer producerdecide on the optimal number of breweries to operate?