Which of the Following Explains Why Long-Run Average Total Cost

question 190

Multiple Choice

Which of the following explains why long-run average total cost at first decreases as output increases?

• A)Diseconomies of scale
• B)Less-efficient use of inputs
• C)Fixed costs becoming spread out over more units of output
• D)Gains from specialization of inputs

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Definitions:

Work in Progress

Inventory representing partially completed goods which require further work before they are ready for sale.

Equivalent Units

A metric used in cost accounting to express the work done on partially finished goods as an equivalent number of fully completed units.

Partially Completed

Items or projects that have been started but are not yet finished to completion.

Automotive Parts

Components and systems that are used in the manufacturing and maintenance of vehicles, including cars, trucks, and motorcycles.