In the Long Run, a Firm Might Experience Rising Average

question 168

Multiple Choice

In the long run, a firm might experience rising average total costs due to

• A) economies of scale.
• B) diseconomies of scale.
• C) the law of supply.
• D) the law of diminishing marginal returns.

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Definitions:

Interest Rate

The percentage charged on the total amount of borrowed money or paid on investments, over a specific period of time.

Maturity Value

The total amount that will be paid to an investor at the end of a fixed-income security's term, including both the original principal and the interest earned.

Promissory Note

A written promise to pay a specified amount of money at a predetermined time or on demand to a named party.

Interest Value

The amount of income earned from an investment, typically expressed as a percentage of the principal.