A Firm Scaled Down Its Operation by Reducing All Inputs

question 113

Multiple Choice

A firm scaled down its operation by reducing all inputs by 50% and experienced a less-than-50% decrease in output. If all input prices remain unchanged, the firm's long-run average cost exhibits

• A) economies of scale at the current output level.
• B) diseconomies of scale at the current output level.
• C) a constant long-run average cost at the current output level.
• D) diminishing marginal returns at the current output level.

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Definitions:

Statute Of Limitations

A law prescribing a time limit for bringing certain kinds of legal action, after which claims or charges cannot be enforced or prosecuted.

Sale Of Goods

Transactions involving the transfer of ownership of tangible items from a seller to a buyer for a price.

Equitable Maxim

Fundamental principles guiding the fair and just application of the law, ensuring decisions are made with equity in legal proceedings.

Seeks Equity

A legal principle where a party requests a fair and impartial remedy in a dispute, typically when monetary damages are insufficient.