Economies of Scale Lead to Declining Long-Run Average Cost Curves

question 91

True/False

Economies of scale lead to declining long-run average cost curves.

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Definitions:

Activity Base

A measure used to assign costs to cost objects based on their use of activities, often used in activity-based costing.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service.

Machine Hours

A measurement of the amount of time a machine is operated, used in allocating manufacturing costs to products.

Annual Overhead Costs

The total of all expenses that are not directly tied to the production of goods or services within one year.