When a Firm's Long-Run Average Total Cost Falls as Its

question 25

Multiple Choice

When a firm's long-run average total cost falls as its output increases, the firm is experiencing

• A) constant returns to scale.
• B) decreasing marginal returns.
• C) economies of scale.
• D) decreasing cost of marginal returns.
• E) diseconomies of scale.

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Definitions:

Functional Products

Goods designed primarily for their utility and performance rather than their aesthetic qualities.

Achievement-motivated

A characteristic of individuals who are driven by a strong desire to accomplish significant goals, often seeking out challenges and demonstrating persistence.

Services

Intangible activities or benefits provided by one party to another, often in exchange for payment.

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The achievement of a set goal, objective, or target, often measured by specific criteria such as profit, market share, or personal fulfilment.