The Table Given Below Shows the Average Total Cost of Production

question 86

Multiple Choice

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5

-If a firm experiences economies of scale,

• A)it moves up along the long run average total cost curve.
• B)expansion of output becomes more expensive for the firm.
• C)the firm can reduce its per unit cost by producing less.
• D)the firm must shut down in the long run.
• E)the firm can reduce its per unit cost by expanding production.

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Definitions:

Allowance Account

An account used to reduce the carrying amount of accounts receivable or loans to their net realizable value, reflecting expected losses due to uncollectibility.

Aging

A method used to categorize accounts receivable based on the length of time an invoice has been outstanding.

Accounts Receivable

Unpaid customer debts to a company for goods or services that have been supplied.

Bad Debts Expense

An expense reported on the income statement reflecting the cost of estimated uncollectible accounts receivable.