If the Slope of a Long-Run Total Cost Function Decreases

question 17

Multiple Choice

If the slope of a long-run total cost function decreases as output increases, the firm's underlying production function exhibits:

• A) constant returns to scale.
• B) decreasing returns to scale.
• C) decreasing returns to a factor input.
• D) increasing returns to scale.

---

Definitions:

Antipoverty Programs

Governmental or non-profit organization initiatives designed to reduce or eliminate poverty by providing financial assistance, education, or job training.

Productive Capacity

Refers to the maximum output a system, economy, or machine can produce over a period of time under normal conditions.

Supply of Land

The total availability of land resources that can be used for various purposes, often considered perfectly inelastic.

Perfectly Inelastic

A situation where the quantity demanded or supplied of a good does not change in response to a change in price.