On the Downward Sloping Portion of a Firm's Long-Run Average

question 315

Multiple Choice

On the downward sloping portion of a firm's long-run average cost curve, it is experiencing

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

---

Definitions:

Financial Statements

Financial statements are comprehensive reports created from a company's accounting records, presenting the financial performance and position at a specific point in time.

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders and holds in its treasury.

Stockholders' Equity

The value remaining in a company after liabilities are deducted from total assets; also known as shareholder's equity.

Paid-in Capital

Refers to the funds raised by a company through the issuance of shares. This capital is provided by shareholders in exchange for equity in the company.