If a Variable Input Is Added to Some Fixed Input

question 387

Multiple Choice

If a variable input is added to some fixed input, beyond some point the resulting extra output will decline. This statement describes

• A)economies and diseconomies of scale.
• B)X-inefficiency.
• C)the law of diminishing returns.
• D)the law of diminishing marginal utility.

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Definitions:

Divisional Segment Margin

The profit or loss generated by a specific division or segment of a business, excluding costs not directly tied to that division.

Common Fixed Expenses

Costs that do not vary with the level of production or sales, shared across different segments or products of a business.

Break-Even

The point at which total costs equal total revenues, meaning there is no profit or loss.

Sales Dollars

The total revenue generated from the sale of goods and services within a specific period.