Economies of Scale Are Best Described as Which of the Following

question 2

Multiple Choice

Economies of scale are best described as which of the following?

• A)The average cost remains constant as output increases
• B)The average cost increases as output increases
• C)The average cost declines as output increases
• D)The average costs are cheaper when a firm produces a wider variety of goods
• E)The average cost curve takes the form of a U-shape

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Definitions:

Interest Changes

Adjustments made to the interest rate applicable on loans, savings, or investments over time.

Debt-To-Equity Ratio

This ratio demonstrates the relative levels of debt versus shareholders' equity in financing a company's assets.

Financing Structure

The mix of debt and equity used by a firm to finance its operations and investments.

Stockholders' Equity

The residual interest in the assets of a company that remains after deducting its liabilities, representing ownership interest.