When Long-Run Average Total Cost Decreases as Output Increases,a Firm

question 111

Multiple Choice

When long-run average total cost decreases as output increases,a firm experiences

• A)increasing average fixed cost
• B)decreasing total cost
• C)economies of scale
• D)diseconomies of scale
• E)constant returns to scale

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Definitions:

Initial Cash Outflow

The initial amount of money paid out or expended, typically for an investment or purchase, before any returns are considered.

Required Return

The minimum rate of return an investor expects to achieve by investing in a particular asset or project.

Required Rate

The least yearly interest rate that persuades individuals or entities to dedicate capital to a distinct project or investment opportunity.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time. It's used in capital budgeting to assess the profitability of an investment or project.