Use the Following to Answer Question

question 75

Multiple Choice

Use the following to answer question:
-(Figure: Long-Run Average Cost) Use Figure: Long-Run Average Cost.This firm has _____ in the output region from 0 to A.

• A)decreasing returns to scale
• B)constant returns to scale
• C)increasing returns to scale
• D)negative costs of production

---

Definitions:

Inflation Rate

The Inflation Rate is a measure of the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling, usually expressed as a percentage.

Shoeleather Costs

The increased costs of transactions caused by inflation, including the time and effort spent to avoid holding cash that is rapidly losing value.

Menu Costs

The expenses companies incur while changing their prices, including costs related to reprinting menus, updating marketing materials, and altering price tags.

Saving Distortions

Alterations in the savings behavior of individuals or institutions due to external influences, such as tax policies or inflation.