In the Long Run,constant Returns to Scale Necessarily Occur When

question 240

Multiple Choice

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

• A) total cost increases.
• B) total cost does not change.
• C) average total cost increases .
• D) average total cost does not change.
• E) production increases by more than does the firm's total cost.

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Definitions:

Recorded

The process of entering financial transactions into accounting records.

Long-Lived Assets

Assets that are expected to provide economic benefits to a business for a period longer than one year, such as buildings, machinery, and equipment.

Interest

Interest is the cost of borrowing money or the payment received for lending money, typically expressed as an annual percentage of the principal amount.

Double-Declining-Balance

A method of accelerated depreciation that results in higher depreciation expense in the early years of an asset's life.