Which of the Following Statements Is TRUE

question 68

Multiple Choice

Which of the following statements is TRUE?

• A)A Cobb-Douglas production function can have different returns to scale at different output levels.
• B)It is impossible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level.
• C)It is possible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level.
• D)None of the above.

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Definitions:

Long Run

A period of time in which all factors of production and costs can be fully adjusted, unlike the short run where some factors are fixed.

Total Revenue

The total amount of money received by a company or entity from its sales of goods or services, before deducting any expenses.

Sales Commissions

A portion of the revenue earned from selling a product or service that is paid to the sales representative or agent responsible for the transaction.

Fixed Costs

Costs that do not change with the level of output produced, such as rent, salaries, and loan payments.