Economies of Scale Occur When ________

question 62

Multiple Choice

Economies of scale occur when ________.

• A) increasing production lowers the average cost of each unit produced
• B) increasing production increases the average cost of each unit produced
• C) decreasing production lowers the average cost of each unit produced
• D) decreasing production increases the average cost of each unit
• E) increasing production increases the fixed cost of doing business

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Definitions:

Sales Returns

Transactions where a buyer returns previously purchased merchandise back to the seller, leading to a refund or credit.

Gross Sales

The total of all sales transactions before any deductions for returns, allowances, or discounts.

Sales Discounts

Reductions granted on the selling price of goods or services to encourage prompt payment by customers.

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a refund or credit.