When a Firm's Long-Run Average Total Costs Do Not Vary

question 9

Multiple Choice

When a firm's long-run average total costs do not vary as output increases,the firm exhibits

• A) economies of scale.
• B) constant returns to scale.
• C) diseconomies of scale.
• D) the only output level associated with an efficient use of resources.

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Definitions:

Planning Budget

A financial forecast or projection, detailing expected revenues and expenses within a future period.

Net Operating Income

The profit a company generates from its regular business operations, excluding expenses and revenues from non-operating activities.

Client-visits

The act of meeting with clients or potential clients, often for the purposes of discussing business opportunities, providing services, or strengthening relationships.

Activity Variance

The difference between the budgeted and actual amount of an activity, such as hours worked or units produced, affecting budget and cost planning.