If There Are Increasing Returns to Scale, Then Average Costs

question 9

True/False

If there are increasing returns to scale, then average costs are a decreasing function of output.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

Stock Split

A corporate action that increases the number of a corporation's outstanding shares by dividing each share, which in turn reduces the price per share.

Stockholders' Equity

The part of the company's assets that belongs to the shareholders after debts and liabilities have been settled, equivalent to the residual assets minus liabilities.

Preferred Stock

A class of ownership in a corporation with a fixed dividend, receiving payment before common stockholders and typically without voting rights.