When Isoquants Get Progressively Further Apart There Is

question 21

Multiple Choice

When isoquants get progressively further apart there is

• A) increasing returns to scale
• B) decreasing returns to scale
• C) constant returns to scale
• D) not enough information to determine

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Definitions:

Mixed Cost

An expense that contains both fixed and variable components, changing in total with the level of activity though containing a constant element.

Fixed Cost

Expenses that do not change in total with changes in the level of output or activity within a certain range.

Sales Volume

Refers to the total number of products a business sells over a specific time period, critical for assessing market performance.

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor directly involved in manufacturing.