For Costs to Be a Linear Function of Output

question 6

Multiple Choice

For costs to be a linear function of output:

• A) returns to each factor input must be constant.
• B) input prices must change at a constant rate.
• C) product prices must be constant.
• D) returns to scale must be constant.

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Definitions:

Complete Performance

The full execution of duties or services as stipulated in a contract without any deviations or failures.

Discharge Agreement

A legal document that releases parties from their contractual obligations or settles their debts.

Contractual Relationship

A Contractual Relationship is a legally binding connection between two or more parties established through an agreement that specifies mutual obligations.

Acceleration Clause

A contractual term that comes into effect when there is a failure to make an instalment payment and which requires that the entire debt plus expenses be paid.