When Long-Run Average Total Cost Increases as Output Increases,a Firm

question 120

Multiple Choice

When long-run average total cost increases as output increases,a firm experiences

• A)diseconomies of scale
• B)economies of scale
• C)constant returns to scale
• D)decreasing marginal cost
• E)greater total cost in the long run than in the short run

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Definitions:

Preferred Stock

A type of stock that provides dividends before any dividends are provided to common stockholders, often with fixed rates.

Par Value

The face value of a bond or stock, as specified by the issuing company, which does not necessarily reflect its market value.

Legal Capital

The minimum amount of capital that a company is required to maintain for the protection of its creditors.

Stockholders

Individuals or entities that own shares in a corporation, giving them various rights including a claim on part of the company's profits in the form of dividends.