When,for a Firm,long-Run Average Total Cost Decreases as the Quantity

question 61

Multiple Choice

When,for a firm,long-run average total cost decreases as the quantity of output increases,we have a situation of

• A)economies of scale.
• B)diseconomies of scale.
• C)coordination problems arising from the large size of the firm.
• D)fixed costs greatly exceeding variable costs.

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Definitions:

Activity-based Management

A method of management that focuses on business activities for improving the value received by the consumer and the profit gained by providing this value.

ABC

Activity-Based Costing (ABC) is a method of assigning indirect costs to products and services based on the activities they require.

Batch Size

The quantity of units produced in a single production run or batch, affecting efficiency and cost.

Complexity

The state or quality of being intricate or complicated, often referring to processes, systems, or issues with many interrelated parts or aspects.