A Firm Uses Only Two Inputs to Produce Its Output

question 17

Multiple Choice

A firm uses only two inputs to produce its output.These inputs are perfect substitutes.This firm

• A)must have increasing returns to scale.
• B)must have constant returns to scale.
• C)could have increasing returns to scale, constant returns to scale, or decreasing returns to scale.
• D)must have decreasing returns to scale.
• E)must have decreasing returns to scale in the short run and constant returns to scale in the long run.

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Definitions:

Revenue Journal

A specialized accounting journal where a business records its revenue transactions.

Cash Sales

Transactions in which goods or services are exchanged for immediate payment in the form of cash or its equivalents.

Accounting System

An accounting system is a structured process of collecting, recording, summarizing, and reporting financial information of a business.

Customer Type

Categories into which customers are divided based on characteristics, purchasing behaviors, or needs, influencing marketing strategies and sales approaches.