Podcast
Questions and Answers
What happens when input costs constitute a smaller share of average cost?
What happens when input costs constitute a smaller share of average cost?
- Economies of scale decrease (correct)
- Marginal costs increase
- Apportioned fixed costs decrease
- Fixed costs decrease
In process innovations where a labour-intensive process is replaced by a capital-intensive process, what happens to marginal costs?
In process innovations where a labour-intensive process is replaced by a capital-intensive process, what happens to marginal costs?
- Marginal costs decrease
- Fixed costs decrease
- Marginal costs remain the same
- Marginal costs increase (correct)
What type of innovation generates economies of scope?
What type of innovation generates economies of scope?
- Innovation reducing marginal costs (correct)
- Innovation reducing variety of output
- Innovation reducing variety of output
- Innovation increasing fixed costs
How does a reduction in fixed costs affect average cost?
How does a reduction in fixed costs affect average cost?
What happens to economies of scale when fixed costs decrease?
What happens to economies of scale when fixed costs decrease?
What defines a pure process innovation?
What defines a pure process innovation?
How might a process innovation impact the product?
How might a process innovation impact the product?
What is the effect of a reduction in fixed costs with no change in marginal costs?
What is the effect of a reduction in fixed costs with no change in marginal costs?
What characterizes a basic capital-saving innovation?
What characterizes a basic capital-saving innovation?
How does a reduction in marginal costs accompanied by an increase in fixed costs affect a company's chances in the market?
How does a reduction in marginal costs accompanied by an increase in fixed costs affect a company's chances in the market?
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