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Buffalo Aircraft Doubles the Amount of All of the Inputs

Question 1

Multiple Choice

Buffalo Aircraft doubles the amount of all of the inputs it uses-the factory doubles in size and twice as many workers are hired.After this expansion,the number of aircraft produced triples.If the price of inputs is unchanged,this means that Buffalo Aircraft is operating with:


A) increasing marginal cost.
B) economies of scale.
C) increasing average total cost.
D) decreasing average variable cost.

Correct Answer:

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