If a Firm Experiences Constant Returns to Scale at All

question 145

Multiple Choice

If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would

• A)slope downward.
• B)be horizontal.
• C)slope upward.
• D)slope downward for low output levels and upward for high output levels.

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Definitions:

Resale Value

The estimated market value of an asset if sold again; often used in reference to vehicles, electronics, and real estate.

Office Furniture

Equipment and accessories designed for use in a workplace setting, including desks, chairs, and filing cabinets.

Sum-Of-The-Years-Digits

A method of depreciation which accelerates cost recovery of an asset by applying a decreasing fraction of its depreciable cost each year.

Resale Value

The estimated amount that an asset or item is expected to sell for at some point in the future.