Suppose RioTintoAlcan Is Considering the Construction of a New Aluminum

Multiple Choice

Suppose RioTintoAlcan is considering the construction of a new aluminum smelter in Northern Quebec,the operation of which requires a great deal of electricity.Suppose also that the price of electricity is predicted to rise significantly in the near future.As a result,the firm decides to embark on new research and development which leads to the development of a new production technique that uses less electricity per tonne of aluminum produced.This is an example of

A) short- run cost minimization.
B) short- run profit maximization.
C) innovation away from increases in factor prices.
D) long- run economies of scale.
E) the marginal rate of substitution between factors.