CA Foundation Exam > CA Foundation Questions > The negatively-sloped (i.e. falling) part of ...
Start Learning for Free
The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?
- a)Diseconomies of scale.
- b)Diminishing returns.
- c)The difficulties encountered in coordinating the many activities of a large firm.
- d)The increase in productivity that results from specialization.
Correct answer is option 'D'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
The negatively-sloped (i.e. falling) part of the long-run average tota...
Explanation:
The long-run average total cost (LRATC) curve shows the minimum average total cost that a firm can achieve for any given level of output in the long run, when all inputs are variable. It is a U-shaped curve, with a downward-sloping part followed by an upward-sloping part.
The negatively-sloped (i.e. falling) part of the LRATC curve is due to the following reasons:
Specialization and productivity:
- Specialization refers to the division of labor among workers, where each worker performs a specific task that he or she is best at. This leads to an increase in productivity, as workers become more skilled and efficient in their respective tasks.
- Increased productivity leads to a decrease in the average cost of production, as the same amount of output can be produced with fewer resources (i.e. labor, capital, etc.).
- This is why the LRATC curve slopes downward initially, as the firm experiences economies of scale due to specialization and productivity gains.
Advantages of specialization:
- Specialization enables the workers to become more skilled and efficient in performing their respective tasks.
- Workers can focus on their strengths and develop their skills, rather than trying to do everything themselves.
- This leads to a decrease in the amount of time and effort required to produce a given output, and hence a decrease in the average cost of production.
- Specialization also allows the firm to take advantage of economies of scale, as it can produce more output with the same amount of resources, leading to lower average costs.
Conclusion:
Therefore, the correct answer is option D, as the negatively-sloped part of the LRATC curve is due to the increase in productivity that results from specialization.
The long-run average total cost (LRATC) curve shows the minimum average total cost that a firm can achieve for any given level of output in the long run, when all inputs are variable. It is a U-shaped curve, with a downward-sloping part followed by an upward-sloping part.
The negatively-sloped (i.e. falling) part of the LRATC curve is due to the following reasons:
Specialization and productivity:
- Specialization refers to the division of labor among workers, where each worker performs a specific task that he or she is best at. This leads to an increase in productivity, as workers become more skilled and efficient in their respective tasks.
- Increased productivity leads to a decrease in the average cost of production, as the same amount of output can be produced with fewer resources (i.e. labor, capital, etc.).
- This is why the LRATC curve slopes downward initially, as the firm experiences economies of scale due to specialization and productivity gains.
Advantages of specialization:
- Specialization enables the workers to become more skilled and efficient in performing their respective tasks.
- Workers can focus on their strengths and develop their skills, rather than trying to do everything themselves.
- This leads to a decrease in the amount of time and effort required to produce a given output, and hence a decrease in the average cost of production.
- Specialization also allows the firm to take advantage of economies of scale, as it can produce more output with the same amount of resources, leading to lower average costs.
Conclusion:
Therefore, the correct answer is option D, as the negatively-sloped part of the LRATC curve is due to the increase in productivity that results from specialization.
Free Test
FREE
| Start Free Test |
Community Answer
The negatively-sloped (i.e. falling) part of the long-run average tota...
The negatively sloped part of long run avg cost curve is due to economies of scale and here option (d) is economies to scale thats why (d) is ans
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer?
Question Description
The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer?.
The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer?.
Solutions for The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?a)Diseconomies of scale.b)Diminishing returns.c)The difficulties encountered in coordinating the many activities of a large firm.d)The increase in productivity that results from specialization.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup