If Inputs Are Increased by 10 Percent and Output Increases

question 106

Multiple Choice

If inputs are increased by 10 percent and output increases by 20 percent,then __________ are said to exist.

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

---

Definitions:

Goods Available

The total quantity of goods on hand for sale during a specific period, including both beginning inventory and purchases made.

Beginning Inventory

The value of goods available for sale at the start of an accounting period.

Cost of Purchases

The total price paid for goods acquired for resale, including transportation and handling expenses.

Periodic Inventory System

An accounting method where inventory is physically counted and valued at the end of a specific period.