Decreasing Returns to Scale Imply

question 113

Multiple Choice

Decreasing returns to scale imply:

• A)decreasing long run average cost and increasing short-run average cost.
• B)increasing long run average cost.
• C)constant long run average cost.
• D)increasing long run average cost and decreasing short run average cost.

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Definitions:

Evaporation

The process by which a liquid turns into a gas at a temperature below its boiling point through the increase of energy.

Convection

The process of heat transfer through fluids (gas or liquid) by the movement of the heated parts of the fluid itself.

Conduction

The process by which heat or electricity is directly transmitted through a substance when there is a difference of temperature or electrical potential between adjoining regions, without movement of the material.

Allergic Response

The body's immune system reacting abnormally to a foreign substance, such as pollen, food, or medication, resulting in symptoms like itching, swelling, and difficulty breathing.