Other things equal, a decrease in average variable cost would likely

a.

increase the breakeven output level

b.

decrease the breakeven output level

c.

not affect the breakeven output level

d.

decrease the profit-maximising output level

Cost elasticity measures the percentage change in total cost associated with a one percent change in output. If cost elasticity is greater than 1, it indicates

a.

economies of scale

b.

diseconomies of scale

c.

increasing return to scale

d.

none of the above