When a Firm Is Experiencing Diseconomies of Scale

question 49

Multiple Choice

When a firm is experiencing diseconomies of scale,

• A)it should increase the amount of labor it hires.
• B)it should lower its price to the competitive level.
• C)its average total costs will decline if it reduces its scale of operations.
• D)it should increase the size of its plant to decrease its average total costs.

Recognize and explain the importance of the activity index and its role in cost behavior.

Distinguish between different types of costs and their behavior in relation to business activities.

Demonstrate the ability to apply various accounting tools for business decision-making, such as the high-low method.

Understanding the principles of classical conditioning.

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Definitions:

Rose

A type of flowering plant belonging to the genus Rosa, in the family Rosaceae, known for its beauty and fragrance; often symbolizes love and affection.

Doubled

Increased by 100 percent; made twice as large or numerous.

Quadrupled

Quadrupled in amount or worth.

Trade Deficit

A situation that occurs when a country imports more goods and services than it exports, resulting in a negative balance of trade.