If Economies of Scale Exist for a Particular Production Relationship

question 218

Multiple Choice

If economies of scale exist for a particular production relationship, long-run average costs will

• A)rise.
• B)fall.
• C)first rise and then fall.
• D)be unaffected since there is no direct relationship between the two.

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Definitions:

Compounded Semi-Annually

Applying interest to both the initial principal and accumulated interest twice a year.

65 Years

A time period equivalent to sixty-five years, often referenced in discussions of age or time to retirement.

Common Stock

A type of security that represents ownership in a corporation and gives holders voting rights, as well as a share in the company's profits via dividends.

Per Year

A term indicating something occurs, is measured, or is evaluated on an annual basis.