The Term Economy of Scale Refers to Which of the Following

question 26

Multiple Choice

The term economy of scale refers to which of the following?

• A) Increasing costs through the production of larger quantities.
• B) Decreasing costs through the production of larger quantities.
• C) Decreasing costs through the production of smaller quantities.
• D) Increasing costs through the production of smaller quantities.

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Definitions:

Economic Profit

The gap between the total income and the sum of explicit and implicit costs of a business.

Normal Rate

Refers to the standard or usual level at which a particular process occurs or is set, often used in financial contexts such as interest rates.

Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Increasing-Cost Industry

An industry in which production costs increase as output expands, often due to factors like resource depletion or increased demand for inputs.