Increasing Marginal Returns Means That as the Firm Expands Its

question 384

Multiple Choice

Increasing marginal returns means that as the firm expands its output, its

• A) long-run average total cost increases.
• B) long-run average total cost decreases.
• C) short-run average total cost increases.
• D) short-run average total cost decreases.

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Definitions:

Net Cash

The amount of cash that remains after deducting all operational, financial, and investment activities over a period.

Cash Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.

Operating Activities

The day-to-day functions of a business related to producing and selling its products or services, which are reflected in the cash flow statement.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, reflected in the cash flows of a business.