Constant Returns to Scale Are Associated with A

question 55

Multiple Choice

Constant returns to scale are associated with a:

• A) horizontal long-run average cost curve.
• B) horizontal short-run average cost curve.
• C) downward-sloping long-run average cost curve.
• D) downward-sloping short-run average cost curve.

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Definitions:

Incremental Value

The additional or excess value that an action or decision is expected to generate over the base case or current situation.

Acquiring Firm

A company that purchases or takes over another company through a merger, acquisition, or takeover.

Target Firm

In mergers and acquisitions, the company that is being considered or has been chosen for a takeover by another company.

NPV

Net Present Value; a financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.