Returns to Scale Is a ______ Concept Because ______

question 67

Multiple Choice

Returns to scale is a ______ concept because ______.

• A) short-run; it's related to the law of diminishing marginal returns
• B) short-run; it deals with varying the level of one input while holding other inputs constant
• C) long-run; a firm can change its output level only in the long run
• D) long-run; it refers to changes in all of the firm's inputs

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Definitions:

Financial Risk

The prospect of losing capital in an investment or business venture.

Equity Risk

The risk of loss associated with fluctuations in the stock market or the volatile performance of individual stocks.

Capital Structure Policy

A company's decisions and strategies regarding the mix of its financing sources (debt and equity) to fund its operations and growth.

Financial Risk

The likelihood of financial setbacks in an investment or business initiative.