If a Firm Increases Its Output in the ________ and Unit

question 14

Multiple Choice

If a firm increases its output in the ________ and unit costs ________, then the firm is experiencing ________ of scale.

• A) short run; decrease; economies
• B) long run; increase; diseconomies
• C) short run; decrease; diseconomies
• D) long run; increase; economies
• E) long run; decrease; diseconomies

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Definitions:

Financial Break-even

The point at which total revenues and total expenses are equal, resulting in no net profit or loss, indicating the minimum performance level required to avoid losing money.

NPV

NPV (Net Present Value) is a calculation used to determine the present value of an investment's cash inflows and outflows over time, taking into account a specific discount rate.

Variable Costs

Costs that change in proportion to the level of goods or services that a business produces.

Production

The process of creating goods or services by combining labor, materials, and technology.