Question

in the long run a company that produces and sells candy bars incurs total costs of $1,200 when output is 2,400 candy bars and $1,400 when output is 2,900 candy bars. the candy bar company exhibits

Answer 1

The candy bar company demonstrates economies of scale because the average cost per candy bar produced decreases as production increases. Sugar costs heavily affect the industry and cause broader economic and global trade issues.

Step-by-step explanation:

Based on the given information, the candy bar company exhibits economies of scale. This occurs since the average cost of producing a candy bar decreases as the company produces more. When the output increases from 2,400 to 2,900 candy bars, the total cost increases from $1,200 to $1,400; however, the average cost per candy bar decreases.

While the candy industry is affected by sugar costs, these elevated costs also impact U.S. consumers who pay higher food prices. The global impact involves sugar producers in low-income countries who are unable to sell their output profitably due to sugar subsidies and import quotas in the United States.