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Unformatted text preview: possible level for the plant. It follows that (a) the marginal product of labor is equal to the average product of labor. (b) the plant is operating at the maximum possible level of production. (c) the marginal product of labor is also at a maximum. (d) the plant hasn't yet reached the point of diminishing marginal returns. Economies of scale implies that (a) long-run marginal costs exceed long-run average costs. (b) long-run average cost decreases. (c) long-run total costs decrease. (d) short-run average cost decreases. An improvement in technology in an industry (a) produces an upward-sloping market supply curve. (b) shifts the average cost curve upward due to increased labor productivity. (c) shifts the marginal cost curve upward and causes production and profit to rise. (d) results in short-run economic profits and a decline in price below the initial market price, in the long run....
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- Spring '11