Which of the Following Contributes to the Increasing Returns to Scale

question 76

Multiple Choice

Which of the following contributes to the increasing returns to scale in production as a firm expands capacity?

• A)Specialization of labor
• B)Increase in average cost and decrease in output
• C)Increase labor while keeping capital constant
• D)Increase in marginal utility

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Definitions:

Break-Even Point

The level of production or sales at which total revenues equal total costs, resulting in no net loss or gain.

Variable Expenses

Expenses that change in proportion to the amount of goods produced, including materials and wages directly associated with manufacturing.

Break-Even Analysis

A financial calculation that determines the point at which total revenues equal total costs, indicating no profit or loss.

Variable Expenses

Costs that change in proportion to the level of activity or volume of output produced.