When a Firm Experiences Declining Long-Run Average Total Costs as It

question 30

Multiple Choice

When a firm experiences declining long-run average total costs as it produces more output, there are

• A) increasing marginal returns to variable inputs.
• B) economies of scale.
• C) diseconomies of scale.
• D) constant returns to scale.

---

Definitions:

Manufacturing

The process of converting raw materials, components, or parts into finished goods that meet a customer's expectations or specifications.

Product B

A term typically used in economics or marketing to refer to a specific item or service offered by a company, distinguished by its characteristics or its positioning.

Advertising

The activity or profession of producing advertisements for commercial products or services.

Regular Hourly Rate

The fixed amount of money that an employee is paid for each hour of work.