Constant Returns to Scale Occur When the Firm's

question 125

Multiple Choice

Constant returns to scale occur when the firm's

• A) long-run total costs are constant as output increases.
• B) long-run average total costs are constant as output increases.
• C) long-run average cost curve is falling as output increases.
• D) long-run average cost curve is rising as output increases.

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Definitions:

Withdraws

Money taken out of a business by its owner(s) for personal use.

Partnership

A business structure where two or more individuals share ownership, as well as the profits or losses of the business.

Capital Balances

The amount of money or value of assets that a company or an individual has invested in a business.

Net Income

The profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.