A-LevelEconomicsThe price system and the microeconomy9708/33 · May/June 2019 · Q81 Mark

The diagram shows short-run (SRAC) and long-run (LRAC) cost curves for a firm. [Figure 8] Which statement is correct? A When each of the three SRAC curves is U-shaped it shows the existence of economies of scale. B When the LRAC curve is upward-sloping beyond output OQ it shows the existence of diseconomies of scale. C When the minimum point of SRAC2 is below that of SRAC₁ it shows the existence of the law of variable proportions. D When the minimum point of SRAC2 is below that of SRAC3 it shows the existence of economies of scale.

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Topic: The price system and the microeconomy, A-Level Economics (syllabus 9708). Structured question, 1 mark.
Source: A-Level Economics, May/June 2019 Paper 3 Variant 3, question 8.

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