All of the Following Statements Are True of the Minimum

question 29

Multiple Choice

All of the following statements are true of the minimum efficient scale except one. Which one?

• A) All possible economies of scale have been exhausted.
• B) The short-run average total cost curve's minimum point is equal to the long-run average cost curve's minimum point.
• C) Any increase in the scale of operation will encounter diseconomies of scale.
• D) An increase in the output level will increase profit.

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Definitions:

Estimated Machine-Hours

The anticipated amount of machine time required to complete a job or process.

Actual Machine-Hours

The actual number of hours that machines are run during a production period.

Variable Manufacturing Overhead

Refers to the production costs that change in proportion to the level of production activity, such as utilities or raw materials needed for manufacturing.

Machine-Hours

A measure of the amount of time a machine is operated in the production process, often used in costing and budgeting.