When There Are Increasing Returns to Scale, Average Costs Must

question 42

Multiple Choice

When there are increasing returns to scale, average costs must
Be:

• A)falling.
• B)rising.
• C)constant.
• D)falling, then rising.

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Definitions:

Textiles

Materials made from fibers, filaments, threads, or yarns, typically used in the production of fabrics and cloth.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost compared to others.

Absolute Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

Productive Advantage

Occurs when a country, business, or individual produces a good or service at a lower opportunity cost than competitors, leading to more efficient production.