If a Firm's Average Total Costs Decrease as It Increases

question 11

Multiple Choice

If a firm's average total costs decrease as it increases its scale of production,the firm is experiencing

• A) economies of scale.
• B) diseconomies of scale.
• C) increasing returns from specialization.
• D) diminishing marginal product.
• E) constant returns to scale.

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Definitions:

Compounded Quarterly

A repetitive method of calculating interest where the interest is calculated and added to the principal every three months, leading to an increase in the amount of interest earned over time.

Regular Investment

An investment strategy involving the consistent investment of a fixed amount of money at regular intervals, regardless of market conditions.

Accumulate

To gather or collect over a period of time, often referring to interest, investments, or assets.

Quarterly Basis

A period or system where certain operations or calculations, such as financial reports or interest payments, are done every three months.