Economics 9708 · AS & A Level · Economic methodology

Economic methodology — practice question

Which statement is the correct one?

  • AWhen each of the three SRAC curves is U-shaped it shows the existence of economies of scale.
  • BWhen the LRAC curve is upward-sloping beyond output OQ it shows the existence of diseconomies of scale.
  • CWhen the minimum point of SRAC2 is below that of SRAC1 it shows the existence of the law of variable proportions.
  • DWhen the minimum point of SRAC2 is below that of SRAC3 it shows the existence of economies of scale.

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