If a Firm Experiences a Decrease in Average Total Cost

question 175

Multiple Choice

If a firm experiences a decrease in average total cost as its size increases, it is experiencing

• A) rent-seeking behavior.
• B) economies of scale.
• C) x-inefficiency.
• D) network effects.

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Definitions:

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Equipment

Physical assets used in the operation of a business, such as machinery, computers, and vehicles, often considered in terms of its depreciation or investment value.

Invoice Price

The price initially set by the manufacturer or provider for a product or service, usually before any discounts or increases for market forces.

Accrued Interest

Interest that has accumulated on a bond since the last interest payment was made but has not yet been paid to the bondholder.