If the Positive Externalities Associated with Learning by Doing Are

question 45

Multiple Choice

If the positive externalities associated with learning by doing are sufficiently great, production will be characterized by:

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

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Definitions:

Break-even Point

The level of sales at which total revenues equal total costs, resulting in no profit or loss.

Variable Cost

Variable costs vary directly with the level of production output and can include expenses like raw materials and labor directly involved in a product's manufacturing.

Fixed Costs

Fixed costs are those business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed to variable costs in a company's cost structure.