Increasing Returns to Scale in an Industry

question 41

Multiple Choice

Increasing returns to scale in an industry:

• A)give all businesses a competitive advantage
• B)increase a business's chance of becoming larger in size
• C)generally means that businesses are relatively small
• D)lead to an increase in small business entries within the industry
• E)are more common in resource-based industries

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Definitions:

Administrative Expenses

Expenses that are not directly tied to the production of goods or services, such as salaries of administrative personnel, rent, and utilities.

Total Debts

The sum of all financial obligations a company owes to external parties, including bonds, loans, and other forms of debt.

Gross Asset

Total value of all assets owned by an entity before any deductions for liabilities or depreciation.

Estate Tax

A tax levied on the net value of the estate of a deceased person before distribution to the heirs.