Which of the Following Statements Is Correct If a Firm

question 22

Multiple Choice

Which of the following statements is correct if a firm builds a large plant and,at economic capacity output,its short-run average cost increases?

• A)Decreasing returns to scale must be present.
• B)Increasing returns to scale must be present.
• C)Constant returns to scale must be present.
• D)Decreasing,increasing and constant returns to scale are all possible.

---

Definitions:

Framed

The way information or situations are presented or perceived, often influencing decision-making or judgment.

Disputes

Conflicts or disagreements between parties that can arise from differing views, interests, or claims.

Arbitrators

Individuals or panels appointed to settle disputes or conflicts, typically outside of court, by making a decision after hearing each party's case.

Perception

The process by which individuals organize and interpret their sensory impressions to give meaning to their environment.