It Is Common in Large Breweries for the Long-Run Average

question 231

Multiple Choice

It is common in large breweries for the long-run average total cost to decline as output increases.This indicates that many breweries operate with:

• A)diseconomies of scale.
• B)diminishing marginal returns.
• C)economies of scale.
• D)constant returns to scale.

---

Definitions:

Reinvestment

The process of using dividends, interest, or any form of return earnings to purchase additional shares or units instead of receiving the earnings in cash.

Compound Interest

This refers to the interest that is calculated on both the original principal amount and on the interest that has previously been added to that principal in past periods.

Initial Principal

The original sum of money borrowed in a loan or invested, before any interest or profit is added.

Reinvested

The act of using dividends, interest, or any form of returns to purchase additional shares or assets rather than taking cash.