Generally Speaking, If a Firm Faces Decreasing Average Total Costs

question 152

Multiple Choice

Generally speaking, if a firm faces decreasing average total costs of production throughout its entire range of output, then

• A)more firms will enter the market.
• B)it will be unable to remain in business.
• C)the firm is a natural monopoly.
• D)the firm is able to earn only a normal profit.

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Definitions:

Intangible Assets

Assets that have value to a business but are not visible.

Long-Term Equity

Investments in stocks or other equity instruments that are intended to be held for a period longer than one year for potential appreciation in value.

Accounts Payable

The amounts owed by a business to its suppliers or creditors for goods and services received on credit.

Noncompete Clause

A provision often included in a contract to purchase a business that restricts the seller from entering the same type of business within a specified area for a certain amount of time.