Suppose That a Firm's Long-Run Average Total Costs of Producing

question 196

Multiple Choice

Suppose that a firm's long-run average total costs of producing an individual income tax return is $75 when it produces 1,000 returns and $75 when it produces 1,200 returns. For this range of output, the firm is experiencing

• A)economies of scale.
• B)constant returns to scale.
• C)diseconomies of scale.
• D)specialization.

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Definitions:

Hypothesized Reason

A suggested theory developed from minimal evidence intended to serve as a foundation for additional research.

Statistical Significance

A determination that a relationship between variables is not likely to be due to chance at a specified level of probability.

Type II Errors

A false negative in hypothesis testing, where the test fails to reject a false null hypothesis.

Type I Errors

Occurs when a researcher incorrectly rejects a true null hypothesis, mistakenly concluding that an effect exists.