When Decreasing Returns to Scale Occur

question 54

Multiple Choice

When decreasing returns to scale occur:

• A)the long-run average cost curve falls
• B)marginal cost intersects average cost
• C)the long-run average cost curve rises
• D)average fixed cost will rise
• E)average variable cost will fall

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Definitions:

Financial Position Accounts

Accounts that provide information about the resources, obligations, and net worth of an entity at a specific point in time.

Statement Of Income Accounts

A financial report that shows a company's revenues, expenses, and net income over a specific period, highlighting its profitability.

Accounting Cycle

Describes the systematic process of recording and processing all financial transactions of a company, from when the transaction occurs to its representation in the financial statements.

Adjusting Entries

Documentation of transactions at the conclusion of a financial cycle to accurately apportion profits and costs to the period they were realized.