Gce Model Questions Vol1 2020 Economics Question 30
Practice objective / multiple choice question 30 from the 2020 Gce Model Questions Vol1 Economics examination.
A manufacturing firm's average cost (AC) at different output levels is given below:\n\n\(\begin{array}{c|cccc}\nQ\ (\text{units}) & 100 & 200 & 400 & 800\\\n\hline\nAC\ (£) & 12 & 10 & 9 & 8.5\n\end{array}\)\n\n(a) Based on the trend in AC, state whether the firm is experiencing economies of scale, constant returns to scale, or diseconomies of scale over the range shown.\n(b) Using the midpoint formula, calculate the elasticity of average cost with respect to output between \(Q=200\) and \(Q=400\). Give the elasticity to two decimal places.
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This is Gce Model Questions Vol1 2020 Economics Question 30. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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