If a Firm Is Experiencing Constant Returns to Scale

question 44

Multiple Choice

If a firm is experiencing constant returns to scale

• A)long-run average total cost neither rises nor falls as production increases
• B)average fixed cost is zero
• C)the increase in average variable cost is exactly offset by a decrease in average fixed cost
• D)the decrease in average variable cost is exactly offset by an increase in average fixed cost
• E)long-run average total cost is zero.

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Definitions:

Psychological

Pertaining to the mind or to mental states and processes; relating to psychology.

Distress Criterion

A measure used in psychology to determine whether an emotional response to a situation is proportionate to the severity of the event.

Disruptive Behavior

Actions that interrupt or hinder proper function or proceedings, often referring to patterns of negative behavior in educational or social settings.

Societal Norms

Shared expectations and rules that guide behavior of people within social groups, which can vary between different societies or cultures.