The Law of Diminishing Marginal Returns

question 91

Multiple Choice

The law of diminishing marginal returns

• A)is a short run concept.
• B)is a long run concept.
• C)is both a short run and a long run concept.
• D)does not hold in the real world.

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Definitions:

Activity-Based Costing

A costing methodology that assigns costs to products or services based on the activities and resources that go into their production or provision, aiming for more accurate cost allocation.

Batch Setup

The process of preparing machines and equipment for a specific batch of production, including adjustments and calibrations.

Activity Cost Pool

A way to aggregate all costs associated with a particular business activity, facilitating more accurate allocation of overheads to products or services.

Activity-Based Costing

An accounting method that assigns costs to products and services based on the activities they require, aiming for more precise cost allocation.