Returns to Scale Refers to

question 11

Multiple Choice

Returns to scale refers to

• A)what happens to output when at least one input is fixed and one is varied.
• B)what happens to output when all inputs are held fixed.
• C)what happens to output when all inputs are varied in some proportion.
• D)the law of diminishing returns.

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Definitions:

Market Price

The current price at which a good or service can be bought or sold in the marketplace.

Perfectly Competitive Industry

An economic framework where numerous sellers and buyers exist, with unrestricted entry and exit, and the product offered is uniform.

Increase Revenue

Strategies or actions that lead to a rise in the total amount of money received by a company for goods sold or services provided.

AVC

The average variable cost, which is the total variable costs divided by the quantity of output produced.