uiz: Exam 3 Time Remaining: 00:28:17 Submit Quiz This Question: 1 pt 23 of 40 (3

Question

uiz: Exam 3 Time Remaining: 00:28:17 Submit Quiz This Question: 1 pt 23 of 40 (36 complete) This Quiz: 40 pts possible e's average total cost will be lower than Wal -Marts and always experience economies of scale A. The 7-Eleven stor B. Wal-Mart will definitely have lower average costs because supercenters serv e many more customers scale total cost will decline faster than the 7-Eleven store and experience diseconomies of may have economies of scale depsnding on how many customers are served. O c. Wal-Mart's average D. Wal -Mart or 7-Eleven E. The 7-Eleven store will defimitely have lower average costs because their small stores are cheaper to build OUT CHE US Privacy Teerms of General Cookoe

Explanation / Answer

Question 1. Option B

Explanation: A Wal-Mart superstore can serve much more number of customers because of its capacity. The average total cost falls because of economies of scale which takes place because of higher production level. So, Wal-Mart would have a lower average total costs.

Question 2. Option D

Explanation: When the demand for ski trips increase, the price will go up at the given level of supply. Now, the higher price would motivate existing suppliers to supply more or make new suppliers enter the market. So, quantity supplied would increase.

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