When the Long-Run Average Total Cost Curve Is Downward-Sloping as Output

question 305

True/False

When the long-run average total cost curve is downward-sloping as output increases,the firm has diseconomies of scale.

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Definitions:

Scrap Value

The estimated resale value of an asset after its useful life is over and it can no longer be used as intended.

Double-Declining-Balance

A method that determines a depreciation amount for the first year that is approximately twice the straight-line rate.

Scrap Value

The predicted revenue from selling an asset at the conclusion of its serviceable life.

Units-Of-Production Method

A depreciation method that allocates cost based on the actual usage, activity, or units of production of the asset.