-The Table in the Above Figure Shows the Levels of Output

question 95

Multiple Choice

-The table in the above figure shows the levels of output resulting from different levels of inputs.Which of the following conclusions can be drawn from this information?

• A) Increasing returns to scale exist between 100 and 200 units of output.
• B) Constant returns to scale exist throughout all levels of production.
• C) Labor is subject to diminishing marginal productivity in the short run.
• D) No firm conclusions can be drawn.

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Definitions:

Tangent

A straight line that touches a curve at a single point without crossing it at that point.

Long-run Equilibrium

A state in a market where all firms are making normal profits, with no incentives for entry or exit, and all factors of production are variable.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers.

Long Run

A period of time in which all factors of production and costs are variable, allowing companies to adjust to market changes.