In the Long Run for Firm A,total Cost Is $105

question 77

Multiple Choice

In the long run for Firm A,total cost is $105 when output is 3 units and $120 when output is 4 units.Does Firm A exhibit economies or diseconomies of scale?

• A)Diseconomies of scale, since total cost is rising as output rises.
• B)Diseconomies of scale, since average total cost is falling as output rises.
• C)Economies of scale, since total cost is rising as output rises.
• D)Economies of scale, since average total cost is falling as output rises.

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Definitions:

Little Return

A situation where an investment yields a minimal profit, often below the expectations of the investor.

Low Level of Cash

This term indicates a situation where a business or individual has minimal amounts of liquid assets or money on hand.

Precautionary Demand

The desire to hold cash or liquid assets to guard against unexpected events.

Payments to Vendors

Money transfers made by a business to its suppliers for goods or services received.