If the Total Cost of Producing 10 Jets Is $28

question 123

Multiple Choice

If the total cost of producing 10 jets is $28 million and the total cost of producing 11 jets is $30 million, this firm is experiencing

• A) economies of scale in the range of 10 to 11 jets.
• B) constant returns to scale in the range of 10 to 11 jets.
• C) diseconomies of scale in the range of 10 to 11 jets.
• D) increasing average variable costs in the range of 10 to 11 jets.

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Definitions:

Installment Payments

A system of paying for goods or services over a period of time in regular, scheduled payments.

New Business

A venture that has been recently established, entering its initial operational stage in the marketplace.

Valuation

The process of determining the present value of an asset or a company based on earnings, market value, or other methods.

Tangible Assets

Physical assets that have value and exist in a physical form, such as machinery, buildings, and inventory.