If Production Displays Diseconomies of Scale, the Long-Run Average Cost

question 149

Multiple Choice

If production displays diseconomies of scale, the long-run average cost curve is

• A)above the short-run average total cost curve.
• B)above the long-run marginal cost curve.
• C)upward sloping.
• D)downward sloping.

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Definitions:

Present Value

The current value of a future amount of money or stream of cash flows given a specified rate of return, used to assess the worth of future cash flows today.

Future Value

The estimated value of a current asset or an amount of money at a specified date in the future, based on an assumed rate of growth or interest.

Interest Component

The portion of a payment that is attributed to interest on borrowed capital.

Compounded Annually

An interest calculation method where the interest is added to the principal at the end of each year, and future interest accrues on the new principal.