When a Firm Is Experiencing Diseconomies of Scale

question 392

Multiple Choice

When a firm is experiencing diseconomies of scale,

• A) long-run average total cost is minimized.
• B) long-run average total cost is greater than long-run marginal cost.
• C) long-run average total cost is less than long-run marginal cost.
• D) long-run marginal cost is minimized.

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Definitions:

Efforts-Expended Method

A accounting technique used to recognize revenue proportionally to the work or effort that has been completed on a project, commonly applied in long-term contracts.

Output Measures

Metrics or indicators used to quantify the level of products or services produced by a company or an industry.

Deposit Method

A method of accounting used for transactions where the receipt or payment of money precedes the delivery of goods or services, recognizing the transaction when the delivery occurs.

Revenue Recognition

The guideline in accounting that determines the precise situations where revenue should be recognized or reported.