It Is Common in Large Beer Breweries for the Long-Run

question 69

Multiple Choice

It is common in large beer breweries for the long-run average total cost to decline as output increases.This indicates that many breweries operate under:

• A)diseconomies of scale.
• B)diminishing marginal returns.
• C)economies of scale.
• D)constant returns to scale.

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Definitions:

Closely Held

A business owned by a limited number of shareholders with no public market for its shares.

No-Par Stock

Shares issued without a par value, which means their face value is not fixed in the stock certificate, enabling more flexibility in setting the share prices.

Stated Value

The nominal value assigned to no-par value stock by the company's board of directors, used for accounting purposes.

Legal Capital

The minimum amount of capital that a company is required to maintain as per law, to protect creditors and ensure that the company remains solvent.