Suppose a Firm Is in a Range of Production Where

question 199

Multiple Choice

Suppose a firm is in a range of production where it is experiencing economies of scale. Knowing this, we can predict that

• A)the long-run average total cost curve is upsloping.
• B)a 10 percent increase in all inputs will increase output by less than 10 percent.
• C)a 10 percent increase in all inputs will increase output by more than 10 percent.
• D)the firm is encountering problems of managerial bureaucracy because of its size.

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Definitions:

Accounts Payable

The amount of money owed by a company to its creditors for goods and services purchased on credit.

General Ledger

A comprehensive set of accounts that provides a complete record of all financial transactions of a business, used to prepare financial statements.

Trial Balance

A report listing all accounts and their balances at a specific time, verifying that total debits equal total credits.