Returns That Occur in the Long Run When Average Total

question 38

Multiple Choice

Returns that occur in the long run when average total cost does not depend on the quantity of output are called:

• A)economies of scale.
• B)diseconomies of scale.
• C)constant returns to scale.
• D)minimum average total cost.

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Definitions:

Isocost

A line that represents all combinations of inputs which have the same total cost for a firm, used in production theory to analyze cost minimization.

Price Of Labor

The wage rate or salary that employers pay to employees in exchange for their work.

Isocost

A line that represents all the combinations of inputs that have the same total cost.

Price Of Labor

The compensation (wages, salaries, and benefits) paid to employees for their work or services.