Suppose That a Firm's Long-Run Average Total Costs of Producing

question 638

Multiple Choice

Suppose that a firm's long-run average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing

• A)economies of scale.
• B)constant returns to scale.
• C)diseconomies of scale.
• D)coordination problems.

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Definitions:

Dividends

A portion of a company's earnings distributed to its shareholders.

Operating Expenses

Costs associated with running a business that are not directly tied to producing goods or services, such as salaries and rent.

Prepaid Expenses

Costs paid in advance for services or goods to be received in the future, recognized as assets on a balance sheet until they are consumed or used.

Liabilities

Financial debts or obligations that arise during the course of business operations, owed by a company to another entity.