Constant Returns to Scale Refers to Returns That Occur When

question 62

Multiple Choice

Constant returns to scale refers to returns that occur when:

• A)an increase in the quantity of output decreases average total cost in the long run.
• B)an increase in the quantity of output increases average total cost in the long run.
• C)average total cost does not depend on the quantity of output in the long run.
• D)None of these is true.

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Definitions:

Initial Cost

The upfront expenditure involved in acquiring an asset, starting a project, or pursuing an investment.

Canadian Dollars

The official currency of Canada, represented by the symbol CAD.

Long-Run Exposure Risks

Risks that a business faces over an extended period that can impact its financial stability, such as exchange rate fluctuations.

Foreign Exchange

The conversion or trading of one currency into another currency.