If a Firm Is Operating at an Efficient Scale, Average

question 152

Multiple Choice

If a firm is operating at an efficient scale, average total cost must:

• A)rise as output is increased
• B)fall as output is increase
• C)be at its maximum
• D)none of the above will be true

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Definitions:

Asset Acquisition

Asset acquisition refers to the process of obtaining control over assets, typically through purchase or lease, for use in operations.

Straight-Line Depreciation

Straight-line depreciation is an accounting method wherein an asset's cost is evenly distributed over its estimated useful life, leading to a consistent depreciation expense each year.

Salvage Value

The calculated return value of an asset at the end of its functional life.

Useful Life

The period over which an asset is expected to be useful in the operations of a business.