A Firm Will Want to Increase Its Scale of Plant

question 104

Multiple Choice

A firm will want to increase its scale of plant if

• A)it is persistently producing on the upward-sloping part of its short-run average total cost curve.
• B)it is persistently producing on the downward-sloping part of its short-run average total cost curve.
• C)it is producing below minimum efficient scale.
• D)marginal cost is below average total cost.
• E)marginal cost is below average variable cost.

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Definitions:

Unearned Revenue

Money received by an entity for goods or services to be provided in the future, recognized as a liability until the service is performed.

Net Income

The amount of money a company makes once it has paid off all expenses and taxes from its revenue.

Ending Inventory

At the close of an accounting cycle, the valuation of products set for sale, computed by taking the initial inventory, adding the acquisitions, and deducting the cost of goods sold.