-For ABC, Inc

question 83

Multiple Choice

-For ABC, Inc., 250,000 units of output per year represent minimum efficient scale. If ABC, Inc. decides to produce 200,000 units this year, it will be operating in the region of

• A)decreasing returns to scale.
• B)economies of scale.
• C)diseconomies of scale.
• D)constant returns to scale.
• E)none of the above

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Definitions:

Earnings Before Interest And Taxes (EBIT)

A measure of a firm’s performance without regard to how it is financed.

Net Working Capital

A measure of a company's liquidity, calculated as the difference between its current assets and current liabilities.

Total Equity

The financial value representing the amount of money that would be returned to shareholders if all the assets were liquidated and all the company's debts were paid off.

Progressive Tax System

A tax system where the tax rate increases as the taxable amount or income increases.