Mondo's Microbrewery Is Growing Rapidly

question 253

Multiple Choice

Mondo's Microbrewery is growing rapidly. As a result of achieving larger size, the firm realizes it needs to hire quite a few additional employees and upgrade its brewing and bottling equipment, which increases its average costs. The best explanation for these events is that Mondo's Microbrewery is experiencing ________ returns to scale.

• A) increasing
• B) constant
• C) decreasing
• D) first decreasing and then increasing

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Definitions:

Default

Default refers to the failure to repay a loan according to the terms agreed to in the promissory note.

Federal Unemployment Tax Return

This is a tax form filed by employers to report the federal unemployment taxes they have paid, used to fund state workforce agencies.