The Upward-Sloping Portion of a Long-Run Average Total Cost Curve

question 82

Multiple Choice

The upward-sloping portion of a long-run average total cost curve is the result of

• A) economies of scale.
• B) diseconomies of scale.
• C) diminishing returns.
• D) the existence of fixed resources.

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Definitions:

Quick Ratio

A financial metric indicating a company's ability to meet short-term liabilities with its most liquid assets, excluding inventory.

Current Ratio

A financial metric used to measure a company's ability to pay its short-term liabilities with its short-term assets.

Debt Ratio

A financial ratio that compares the amount of debt a company has to its total assets.

Inventory Turnover Ratio

A measure of how many times a company's inventory is sold and replaced over a given period, indicating the efficiency of inventory management.