Economies of Scale Imply That Within Some Range a Firm

question 124

Multiple Choice

Economies of scale imply that within some range a firm can increase the size of operation and

• A) total cost will decrease.
• B) fixed cost will decrease.
• C) average total cost will decrease.
• D) average total cost will increase.
• E) average variable cost will decrease.

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Definitions:

Cash Flow Growth Rate

The rate at which a company's cash flow from operations grows over a specified period, indicating its financial health and efficiency.

Timeframe

A specified period during which certain events or tasks are expected to take place or be completed.

Required Rate Of Return

The lowest annual interest yield required to draw companies or individuals towards investing in a specific project or security.

Compounded Monthly

Refers to the addition of interest to the principal sum of a deposit or loan on a monthly basis, where each month's interest payment is based on the principal plus previously added interest.