In the Long Run,if 1,000 Units Are Produced at a Cost

question 100

Multiple Choice

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

• A) constant economies of scale.
• B) constant returns to scale.
• C) diseconomies of scale.
• D) economies of scale.
• E) constant diseconomies of scale.

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Definitions:

Cost of Preferred Stock

The dividend required to be paid by a company for its preferred shares, expressed as a percentage of the current market price.

Yield-to-Maturity

The total expected return on a bond if the bond is held until its maturity date, considering all interest payments and the repayment of principal.

After Tax

Pertains to the amount of money left over or the value of transactions after all applicable taxes have been subtracted.

Perpetuity Rate of Return

The rate at which an infinite series of cash flows, received indefinitely, is discounted to equate its present value.