If a Firm Doubles Its Output in the Long Run

question 370

Multiple Choice

If a firm doubles its output in the long run and its unit costs of production decline, we can conclude that

• A)technological progress has occurred.
• B)economies of scale are being realized.
• C)the firm is encountering diminishing returns.
• D)diseconomies of scale are being encountered.

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Definitions:

Investing Activities

Financial transactions related to the acquisition or sale of long-term assets and investments.

Accounts Payable Balance

The total amount a company owes to its suppliers or creditors for goods or services received but not yet paid for.

Operating Activities

Transactions and other events that are not investing or financing activities which affect the operational inflows and outflows of cash.

Amortization

The process of spreading out a loan payment over multiple periods or the gradual write-off of an intangible asset over its useful life.