If a Firm Expands by Increasing Output, It Will

question 69

Multiple Choice

If a firm expands by increasing output, it will:

• A) increase average total cost.
• B) decrease fixed cost.
• C) increase fixed cost.
• D) decrease average total cost.

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Definitions:

Sole Proprietorship

A business structure where a single individual owns, manages, and is responsible for all aspects of the business, including liabilities.

Transfer of Ownership

The legal process by which the title of a property or asset is moved from one party to another.

Franchise

A business model where one party (the franchisor) grants another party (the franchisee) the rights to use its trademark and business systems and processes to produce and market goods or services according to certain specifications.

Partnership

A legal form of business operation between two or more individuals who share management and profits.