_____ Occurs When Long-Run Average Total Cost Increases as Output

question 44

Multiple Choice

_____ occurs when long-run average total cost increases as output increases.

• A) Constant returns to scale
• B) Economies of scale
• C) Diseconomies of scale
• D) Minimum efficient scales

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Definitions:

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of a firm's shareholders' wealth maximization.

Straight-Line Depreciation

A way of assigning the cost of a tangible asset throughout its service life in even annual portions.

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business, used to assess the financial health of the entity.

Capital Budgeting

The process by which businesses evaluate and plan for significant investments in projects or assets, aiming to maximize investment returns.