Decreasing Returns to Scale and Diminishing Returns Differ in That

question 24

Multiple Choice

Decreasing returns to scale and diminishing returns differ in that

• A)Diminishing returns is a long-run concept while decreasing returns to scale is a short-run concept.
• B)Diminishing returns is a short-run concept while decreasing returns to scale is a long-run concept.
• C)Diminishing returns is a both short and long-run concept while decreasing returns to scale is a short-run concept.
• D)Diminishing returns is a long-run concept while decreasing returns to scale is a short and long-run concept.

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Definitions:

Property Rights

The legal rights to own, use, and dispose of land, buildings, or goods, protected under law.

Economic Profit

The disparity between a company's complete earnings and its aggregate expenses, covering both direct (explicit) and indirect (implicit) costs.

Human Capital

The collective skills, knowledge, and experiences possessed by an individual or population, viewed in terms of their value to an organization or society.

Physical Capital

Physical capital includes tangible assets such as buildings, machinery, and equipment that are used in the production of goods and services.