Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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8. Which of the following statements is an example of a Scale Effect?
(A). The firm decides to increase output when wages fall because production costs fall.
(B). The firm decides to increase output when the cost of capital increases because production costs have increased.
(C). Companies decide to add workers when wages fall because workers are relatively cheaper than other factors of production.
(D). The company decided to reduce workers when wages fell because workers became relatively more expensive than other factors of production.
(E). All of the above answers are wrong.
Choose one of the answers from the five choices provided. And please, also provide a brief description, explanation or argument for your choice. Thank you Bartleby!
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