If Your Plant Is Operating in the Negatively Sloped Portion

question 105

Multiple Choice

If your plant is operating in the negatively sloped portion of a long-run average cost curve, production exhibits:

• A) higher wages.
• B) economies of scale.
• C) diseconomies of scale.
• D) increased input prices.

Explain the consequences of surplus and shortage caused by price controls.

Describe how price controls affect consumer welfare and market efficiency.

Understand the rationales behind imposing and removing price controls.

Evaluate the impact of supply and demand changes under different price controls.

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Definitions:

Financial Statements

Compiled reports that provide an overview of a business’s financial condition, including income statement, balance sheet, and cash flow statement.

Return on Total Assets

A profitability ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets.

Performance

Refers to the act of carrying out or accomplishing an action, task, or function.

Profit Margin

A financial metric that calculates the percentage of profit derived from revenue after all expenses are subtracted.