When a Decrease in the Scale of Production Leads to Higher

question 325

Multiple Choice

When a decrease in the scale of production leads to higher average costs, the industry exhibits

• A) diminishing returns.
• B) increasing returns to scale.
• C) decreasing returns to scale.
• D) constant returns to scale.

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Definitions:

Learning Potential

The capacity or ability of an individual or organization to gain knowledge or skills.

Core Business Potential

The inherent capacity of a company's primary area of operation to generate revenue and achieve sustainable growth.

Cross-Selling Potential

The ability of a company to sell additional products or services to an existing customer base.

Customer Lifetime Value

An estimation of the total value a business can expect from a single customer throughout the entirety of their relationship.