When a Firm Is Facing Economies of Scale,total Costs Will

question 99

Multiple Choice

When a firm is facing economies of scale,total costs will

• A) decrease as the firm increases its output.
• B) increase at a decreasing rate as the firm increases its output.
• C) decrease at an increasing rate as the firm increases its output.
• D) increase at an increasing rate as the firm increases its output.
• E) increase proportionately to output.

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Definitions:

Credit Policies

The guidelines that a company follows to determine credit limits, terms, and conditions for its customers.

Working Capital Investment

Funds invested in a company's short-term assets, like inventory and accounts receivable, which are necessary for its day-to-day operations.

Accounts Receivable

Amounts owed to a business by customers for goods or services that have been delivered but not yet paid for.

Inventory

The total amount of goods and materials held in stock by a business, part of the company's current assets.