Which of the Following Statements Is Correct If a Firm's

question 60

Multiple Choice

Which of the following statements is correct if a firm's capacity output increases from 300 to 600 and its total costs rise from $40,000 to $78,000?

• A)The firm is experiencing constant returns to scale.
• B)The firm is experiencing decreasing returns to scale.
• C)The firm is experiencing increasing returns to scale.
• D)The firm's long-run average cost must have decreased but its short-run average cost could have either decreased or increased.

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Definitions:

Hard Rocks

Earth materials, such as granite and basalt, that are solid, tough, and resistant to weathering and erosion.

Ice Sheets

Large masses of glacial ice and snow that cover vast areas of land, such as those found in Antarctica and Greenland.

Rivers Flow

The movement of water in a natural stream or river channel, often towards an ocean, sea, lake, or another river.

River Terraces

Flat, step-like landforms found alongside river valleys, formed by the river as it erodes downward into its bed.