Use the Figure Below to Answer the Following Questions

question 119

Multiple Choice

Use the figure below to answer the following questions.

Figure 11.4.1
-Refer to Figure 11.4.1, which illustrates the total product curves for four different plant sizes. One of the fundamental technological facts reflected in the shape of each of the total product curves is the

• A)price of the inputs.
• B)price of the output.
• C)law of diminishing marginal returns.
• D)law of economies of scale.
• E)fact that capital and labour cannot be substituted for each other.

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Definitions:

All Equity

A financial structure where a company is financed entirely through equity without any debt financing.

Leverage

The use of various financial instruments or borrowed capital to increase the potential return of an investment.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed annually, affecting loans, mortgages, and savings.

Unlevered Cost

The cost of an investment that does not take into account the effect of debt in the capital structure.