If Output Is Increased in the Long-Run,average Production Costs in the Presence

question 6

Multiple Choice

If output is increased in the long-run,average production costs in the presence of internal economies of scale will ________,and in the presence of external economies of scale,will ________.

• A) decrease; decrease
• B) increase; remain constant
• C) remain constant; increase
• D) decrease; remain constant
• E) increase; decrease

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Definitions:

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, without changing the shareholders' equity.

Stock Dividend

A distribution of extra shares to shareholders instead of a financial dividend.

Cash Dividend

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

Credit Balance

A situation in an account where the sum of credits exceeds the sum of debits, indicating the company owes money.