As Production Increases and the Fixed Cost Is Divided by Larger

question 252

Multiple Choice

As production increases and the fixed cost is divided by larger quantities of output, this leads to lower average fixed cost.This is referred to as the effect.

• A)diminishing returns .
• B)spreading
• C)constant cost
• D)increasing returns

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Definitions:

Factors Of Production

The economic resources used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Labor

Labor represents the human effort, both physical and mental, used in the production of goods and services.

Capital

Financial assets or the financial value of assets, such as cash and goods, working to produce further wealth or used in the production of goods and services.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, leading to specialized production and trade.