The Long-Run Average Cost of Producing 19 Units of Output

question 86

Multiple Choice

The long-run average cost of producing 19 units of output is $56, and the long-run average cost of producing 20 units is also $56. These numbers illustrate:

• A) decreasing marginal productivity.
• B) constant returns to scale.
• C) economies of scale.
• D) diseconomies of scale.

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Definitions:

Absolute Worth

The intrinsic value or fundamental importance of something, irrespective of its market value or conditions.

Direct Compensation

Monetary benefits provided to employees in exchange for their labor, including wages, salaries, bonuses, and commissions.

Absolute Pay Levels

The specific amount of monetary compensation given to an employee, not relative to external benchmarks or comparisons.

Relative Levels

Comparative rankings or positions of things or individuals in relation to one another within a particular context or hierarchy.