7. For the following industries, state whether the long-run average cost curve has an extended range with a negative slope, a positive slope, or a zero slope. In each case, explain how your answer relates to returns to scale. a. handcrafted pottery b. manufacturing of smart phones c. a particular high-quality variety of coffee

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
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Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 28RQ: What shape of a long-run average cost curve illustrates economies of scale, constant returns to...
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7. For the following industries, state whether the long-run average cost curve has
an extended range with a negative slope, a positive slope, or a zero slope. In each
case, explain how your answer relates to returns to scale.
a. handcrafted pottery
b. manufacturing of smart phones
c. a particular high-quality variety of coffee
d. e-book publishing
Transcribed Image Text:7. For the following industries, state whether the long-run average cost curve has an extended range with a negative slope, a positive slope, or a zero slope. In each case, explain how your answer relates to returns to scale. a. handcrafted pottery b. manufacturing of smart phones c. a particular high-quality variety of coffee d. e-book publishing
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