If a Firm Has Increasing Returns to Scale at All

question 206

Multiple Choice

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

• A)marginal cost for the firm declines over the entire range of output.
• B)average cost for the firm declines over the entire range of output.
• C)fixed costs of operation diminish to zero.
• D)production technology is optimized.

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Definitions:

Identifiable Asset

An asset that can be separated and sold, transferred, or licensed, and has a clear value or benefit to the business.

Amortize

The process of slowly paying off a debt through regular payments over a set period of time.

Infinite Life

A concept in accounting and finance where an asset is considered to have an unlimited useful life and therefore is not depreciated or amortized.

Acquisition Date

The specific date on which control of an asset or business is transferred to the acquirer, marking the point from which the acquisition is included in the acquirer's financial statements.