The Long-Run Expansion Path for a Firm

question 59

Multiple Choice

The long-run expansion path for a firm:

• A)is not necessarily linear,but always slopes upward.
• B)may be backward-bending,if a firm uses less of one input as output increases.
• C)may be backward-bending,if the firm uses more of both inputs as output increases.
• D)is always linear,but not necessarily upward-sloping.

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Definitions:

Consolidated Financial Statements

Financial statements that aggregate the financial position and operating results of a parent company and its subsidiaries, presenting them as a single economic entity.

Inventories Balance

The total value of a company's raw materials, work-in-progress, and finished goods that are considered current assets on a balance sheet.

Parent Entity

A company that owns more than half of another company's stock and has control over it, making the latter a subsidiary.

AASB 12/IFRS 12

Disclosures of Interests in Other Entities, a standard that sets the requirements for disclosing information about an entity's interests in subsidiaries, joint arrangements, associates, and unconsolidated structured entities.