A Firm Produces One Output Using One Input

question 11

Multiple Choice

A firm produces one output using one input.When the cost of the input was $3 and the price of the output was $3, the firm used 6 units of input to produce 18 units of output.Later, when the cost of the input was $7 and the price of the output was $4, the firm used 5 units of input to produce 20 units of output.This behavior

• A)is consistent with WAPM.
• B)is not consistent with WAPM.
• C)is impossible no matter what the firm is trying to do.
• D)suggests the presence of increasing returns to scale.
• E)suggests the presence of decreasing returns to scale.

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Definitions:

Rational Decision-Making

A process of making decisions based on logical and systematic analysis of available information and alternatives.

Organizational Problems

Issues or challenges faced by an organization that hinder its ability to achieve its goals or maintain effective operation.

Chief Executive Officer

A redefinition: The principal executive officer responsible for managing an organization's overall operations and making major corporate decisions.

Strategic Plan

A deliberate document that outlines an organization's direction and goals over a specific period, providing a roadmap for achieving those objectives.