What Is Meant by the Term "Increasing Returns to Scale

question 107

Multiple Choice

What is meant by the term "increasing returns to scale"?

• A)it has the same meaning as increasing costs of production
• B)output rises proportionately more than inputs,resulting in increasing per unit costs
• C)output rises proportionately less than inputs,increasing per unit cost of production in the short run
• D)it implies that the long- run average cost curve is shifting downward
• E)output rises proportionately more than inputs,resulting in lower per unit costs in the long run

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Definitions:

Turnover

The rate at which a company's goods are sold and replaced, or an employee's leaving and being replaced.

Return on Investment

A measure of the profitability of an investment, calculated by dividing the net profit by the initial cost of the investment.

Total Sales

The sum of all sales (revenue) generated by a business within a specific period, reflecting the volume or value of all units sold.

Operating Data

Information related to the day-to-day functions of a business, which includes sales, production volumes, and inventory levels, used to support operational decision-making.