In the Long Run, If Inputs Are Increased by 10

question 130

Multiple Choice

In the long run, if inputs are increased by 10 percent and output increases by 20 percent, then __________ are said to exist.

• A)economies of scale
• B)constant returns to scale
• C)diseconomies of scale
• D)diminishing marginal returns

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Definitions:

Defective Goods

Items that fail to meet quality standards due to flaws or faults, rendering them unsaleable or requiring correction.

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including interest rate, repayment schedule, and other terms of a credit agreement.

Accounts Payable

Amounts a company owes to its creditors for goods or services that have been delivered or used but not yet paid for.

FOB Shipping Point

This term represents a shipping agreement where the buyer takes responsibility for the goods once they are shipped, implying ownership transfer at the seller's location.