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:

Bailor

An individual or entity that entrusts possession of goods or property to another (the bailee) under an agreement.

Bailment

A legal relationship in common law where physical possession of personal property, or a chattel, is transferred from one person to another who subsequently has possession of the property.

Personal Property

Movable assets owned by an individual or corporation, excluding real estate.

Agreed-Upon Manner

pertains to a method or process that all involved parties have mutually accepted or consented to follow.