A Firm Increases Its Output and Its Average Total Costs

question 177

Essay

A firm increases its output and its average total costs remain unchanged.Is the firm experiencing increasing returns to scale,constant returns to scale,or decreasing returns to scale?

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Definitions:

Owner's Equity

Owner's equity represents the owner's claim to the assets of a business after all liabilities have been subtracted.

Owner Investments

Owner investments, also known as owner contributions, refer to money or other assets that owners put into their business for its use.

Revenues

The total income generated from normal business operations and other activities before any expenses are subtracted.

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.