A Firm Has Increasing Returns to Scale If

question 50

Multiple Choice

A firm has increasing returns to scale if

• A) A proportional change in the use of all inputs produces a more than proportional change in output
• B) A proportional change in the use of all inputs produces a less than proportional change in output
• C) A proportional change in the use of all inputs produces the same proportional change in output
• D) An increase in capital leads to an increase in output

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Definitions:

Cost Driver Analysis

The examination of factors that cause costs to change, often used in activity-based costing to identify and manage those factors more effectively.

Trigger Costs

Expenses incurred as a result of initiating specific actions or projects, often used in decision-making to assess the financial impact of those actions.

Activity Performed

A term that broadly refers to any actions or tasks completed during a process or project.

Activity-based Performance Measures

Metrics that evaluate the efficiency and effectiveness of specific actions or processes within an organization.