Which of the Following Is Equivalent to the Costs That

question 197

Multiple Choice

Which of the following is equivalent to the costs that firms incur in acquiring economic resources?

• A) revenues from the product
• B) income of the resources
• C) money flowing from the resources
• D) profits from the resources employed

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Definitions:

Economies of Scale

The cost advantage that arises with increased output of a product, leading to a fall in the per-unit production cost.

Average Total Cost

The total cost of production divided by the number of units produced, essentially representing the per-unit production cost.

Marginal Cost

The financial outlay involved in the manufacture of one more unit of a product or service.

Monopoly Power

The capacity of a firm to control market prices and exclude competition, often by being the sole provider of a product or service.