When a Decrease in the Scale of Production Leads to Higher

question 325

Multiple Choice

When a decrease in the scale of production leads to higher average costs, the industry exhibits

• A) diminishing returns.
• B) increasing returns to scale.
• C) decreasing returns to scale.
• D) constant returns to scale.

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Definitions:

Continuous Metric

A measurement scale that allows for an infinite number of values within a given range, indicating continuous variation.

Time

The indefinite continued progress of existence and events in the past, present, and future regarded as a whole.

Volume

The quantity of three-dimensional space enclosed by a closed surface or the amount of space that a substance or object occupies.

Financial and Market

Related to the economic activities and conditions that affect investment, trading, and valuation decisions in markets.