Dividends Are ________

question 113

Multiple Choice

Dividends are ________.

• A)the same as expenses
• B)a reduction in retained earnings
• C)owners' contributions to the firm
• D)another term for each partner's share of partnership income

---

Definitions:

Variable Cost

Variable cost pertains to a cost that changes in proportion with the level of activity or volume of production in a company.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced, which decreases as production increases.

Law Of Diminishing Returns

An economic principle stating that if one factor of production is increased while others remain constant, the overall returns will eventually decrease after a certain point.

Economies Of Scale

The situation when a firm’s average total cost of producing a product decreases in the long run as the firm increases the size of its plant (and, hence, its output).