A Potential Problem with Having a Long Car Loan Is

question 37

Multiple Choice

A potential problem with having a long car loan is

• A) Low monthly payments.
• B) Low-interest loan.
• C) Negative equity.
• D) Loan preapproval.
• E) All of these are potential problems.

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Diseconomies of Scale

The situation where a company or business grows so large that the costs per unit increase, leading to inefficiency.

Constant Returns to Scale

A condition in production where increasing the inputs results in a proportional increase in output.

Diseconomies of Scale

A condition in which a firm experiences increased costs per unit when it scales up its production due to inefficiencies.