When an Increase in the Firm's Output Reduces Its Long-Run

question 161

Multiple Choice

When an increase in the firm's output reduces its long-run average cost, it experiences:

• A) economies of scale.
• B) diseconomies of scale.
• C) constant returns to scale.
• D) variable returns to scale.

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Definitions:

Privity

A concept in contract law referring to the relationship between parties in a contract, limiting the rights and obligations to those parties directly involved.

Undue Influence

An improper or unfair persuasion that leads another to act against their own will or best interests, particularly in a contractual or testamentary context.

Misunderstanding

A failure to understand something correctly, which can lead to conflicts or voidable agreements in legal contexts.

Unconscionable

Actions or terms in a contract that are so unjust or overwhelmingly one-sided that they shock the conscience or are deemed unfair by law.