There Is a Lower Limit but No Upper Limit for a Random

question 19

Multiple Choice

There is a lower limit but no upper limit for a random variable that follows the _____ probability distribution.

• A) uniform
• B) normal
• C) exponential
• D) binomial

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Definitions:

Constant Returns to Scale

A situation in which output increases by the same proportion as inputs when the scale of production is changed.

Long-run Average Total Cost

The average total cost when all factors of production are variable and economies of scale are fully exploited, indicating the lowest possible cost per unit.

Economies of Scale

Economies of scale refer to the cost advantage that arises with an increased output of a product, as fixed costs are spread out over more units of production, leading to a decrease in the per-unit cost.

Diseconomies of Scale

The phenomenon where production costs increase as a firm's production scale becomes too large, leading to inefficiencies.