If an Additional Employee Adds More Output Than the Previous

question 169

Multiple Choice

If an additional employee adds more output than the previous employee hired, a company is experiencing

• A) returns to scale.
• B) decreasing marginal returns.
• C) increasing marginal returns.
• D) diminishing marginal returns.

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Definitions:

Cost of Goods Sold

The cost of goods sold (COGS) represents the direct costs associated with the production of goods sold by a company, including materials and labor costs.

Earnings Per Share

A company's profit divided by the number of outstanding shares of its common stock, serving as an indicator of the company's profitability.

Book Value

Book value is the net value of a company's assets minus its liabilities, often used to assess if a stock is under or overvalued.

Market-to-Book Ratio

A financial valuation metric comparing a company's current market price to its book value.