If a Firm Doubles Inputs and Produces Three Times the Output

question 40

Multiple Choice

If a firm doubles inputs and produces three times the output, then there are

• A)constant returns to scale.
• B)diminishing marginal product.
• C)decreasing returns to scale.
• D)increasing returns to scale.

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Definitions:

Inventory Period

The average time it takes for a company to turn its inventory into sales, often used to evaluate the efficiency of inventory management.

Accounts Payable Period

The average number of days it takes for a business to pay off its creditors and suppliers.

Receivables Turnover

A financial metric indicating how quickly a company collects payments from its customers, calculated as sales divided by accounts receivable.

Cash Cycle

The period between the outlay of cash for purchases and the collection of cash from customers in a business.