Constant Returns to Scale Means That as All Inputs Are

question 215

Multiple Choice

Constant returns to scale means that as all inputs are increased

• A) total output remains constant.
• B) average total cost rises.
• C) average total cost rises at the same rate as do the inputs.
• D) total output increases in the same proportion as do the inputs.

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Definitions:

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with its quick assets without needing to sell inventory.

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of the firm's financial condition.

Sales On Account

Sales made to customers for which payment is to be made in the future.

Cost Of Goods Sold

The direct expenses related to the manufacturing of products sold by a company, encompassing both materials and labor costs.