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Hugo Includes the Following Sentence in His Memo: "The Increase

question 80

Multiple Choice

Hugo includes the following sentence in his memo: "The increase in profits is greater than any I have seen during my career." What is the flaw in this sentence?


Definitions:

Marginal Cost

The supplementary expenditure required to produce an extra unit of a product or service.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Decreasing Returns

A condition in economics where adding more input (like labor or capital) leads to progressively smaller increases in output.

Long-Run

A term referring to a period of time in economics during which all factors of production and costs are variable.

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