If a Firm Experiences Economies of Scale,then,as Output Increases

question 35

Multiple Choice

If a firm experiences economies of scale,then,as output increases,

• A)short-run total costs decline
• B)long-run total costs rises proportionately more than output
• C)short-run marginal cost must decline
• D)long-run total cost rises proportionately less than output
• E)demand increases

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Definitions:

Initial Cost

The initial expenditure required to acquire an asset, including the purchase price and any additional costs necessary to get the asset ready for its intended use.

Cash Inflows

Funds that are received, whether from business operations, investment returns, or financing activities.

Certainty Equivalent Approach

This is a method used in financial analysis to determine the value of risky investments by finding the risk-free cash flow amount that an investor would accept instead of taking a risk.

Approach

A method or strategy used to tackle a problem or task.