The Lowest Rate of Output Per Unit of Time at Which

question 46

Multiple Choice

The lowest rate of output per unit of time at which long-run average costs for a particular firm are at a minimum is

• A) economies of scale.
• B) diseconomies of scale.
• C) constant returns of scale.
• D) minimum efficient scale.

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Definitions:

Interest Rates

This represents the cost, in percentage terms of the principal, that a borrower incurs from a lender to utilize their assets.

Maturity Risk

The risk of loss to an investor from changes in the price of a bond that arise from changes in the market interest rate. Also called price risk and interest rate risk. The term maturity risk emphasizes the fact that interest-induced price changes are larger with longer maturities.

Bond Prices

The market price for which a bond is bought or sold, influenced by interest rates, credit quality, and other factors.

Interest Rate Movements

Fluctuations in the interest rate over time which can affect borrowing costs and investment returns.