If a Firm Has Increasing Returns to Scale at All

question 175

Multiple Choice

If a firm has increasing returns to scale at all levels of output, the

• A)slope of its long-run total cost curve is always negative.
• B)slopes of its short-run average cost curves are always negative.
• C)slope of its long-run average cost curve is always negative.
• D)slope of its production function is always negative.

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Definitions:

Total Revenue

The income generated by a company from the sale of its goods or services before any costs or expenses are subtracted.

Total Cost

The complete cost of production which includes both fixed and variable costs.

Perfect Competitors

describes a market structure where many firms sell identical products, and no single seller has any influence over market price.

Market Price

The current price at which a good or service can be bought or sold in the marketplace.