A Firm Has a Total Cost Function of C(Q) =

question 128

Multiple Choice

A firm has a total cost function of C(Q) = 50 + 10Q^1/2.The firm experiences

• A)economies of scale.
• B)constant returns to scale.
• C)diseconomies of scale.
• D)all of the statements associated with this question are correct depending on the quantity.

---

Definitions:

Weighted Average Cost of Capital

A calculation of a firm's cost of capital that weights each category of capital proportionally, including equity and debt.

Market Price

The current value at which an asset or service can be bought or sold in the marketplace.

Financial Leverage

Taking on borrowed money to magnify the possible profits of an investment.

EBIT

Profitability metric that disregards interest and income tax expenses, known as earnings before interest and taxes.