In the Long Run Firm a Incurs Total Costs of $1,200

question 228

Multiple Choice

In the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,400 when output is 40 units.Firm A exhibits

• A) diseconomies of scale because total cost is rising as output rises.
• B) diseconomies of scale because average total cost is rising as output rises.
• C) economies of scale because total cost is rising as output rises.
• D) economies of scale because average total cost is falling as output rises.

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Definitions:

Manufacturing Cost Components

The various expenses involved in producing a product, typically including direct materials, direct labor, and manufacturing overhead.

Variable Cost

Variable cost is an expense that changes in proportion to production output or sales volume.

Managerial Accounting

Managerial accounting involves the provision of financial and non-financial information to an organization's management team to assist in decision-making and strategy planning.

Setting Goals

The process of identifying specific, measurable, achievable, relevant, and time-bound objectives that guide individuals or organizations.