If a Firm Triples All of Its Inputs and Its

question 141

Multiple Choice

If a firm triples all of its inputs and its output doubles, it is said to be experiencing

• A)diminishing marginal returns
• B)increasing marginal returns
• C)diseconomies of scale
• D)economies of scale
• E)constant average costs

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Definitions:

Perfectly Elastic

Perfectly elastic describes a situation in which the quantity demanded or supplied can change infinitely in response to any change in price.

Imperfectly Competitive

Describes a market structure where the conditions necessary for perfect competition are not fully met, allowing firms some power to set prices.

Marginal Revenue Curve

A graphical representation that shows how additional revenue varies with changes in output.

Marginal Revenue

Enhanced earnings from selling an additional unit of a product or service.