Which Statement Is FALSE

question 4

Multiple Choice

Which statement is FALSE?

• A)A firm cannot experience both economies of scale and diminishing marginal product.
• B)A firm's long-run average costs can be increasing, decreasing or remain unchanged as output increases.
• C)A firm has no fixed costs in the long run.
• D)Long-run average total costs are decreasing as output increases if a firm is experiencing economies of scale.

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Definitions:

Borrowing Money

The act of obtaining funds from another party, often a financial institution, under the agreement to pay back with interest.

Nominal Rate

The interest rate stated on a loan or investment agreement, not taking into account the effects of inflation, and often differing from the real rate of interest.

Compounded Semi-annually

An interest calculation method where interest is added to the principal sum of a deposit or loan twice a year, leading to compound interest.

Effective Rate

The effective rate, also known as the annual equivalent rate, is the interest rate on an investment or loan that accounts for the effects of compounding over a given period.