When the Curve That Envelops the Series of Possible Short-Run

question 75

Multiple Choice

When the curve that envelops the series of possible short-run average total cost curves is horizontal, this means that there are:

• A) economies of scale.
• B) diseconomies of scale.
• C) constant returns to scale.
• D) diminishing returns.

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Definitions:

Capital Funds

Capital funds are financial resources that a company or organization uses for long-term investment, expansion, and operational purposes.

Opportunity Costs

The cost of an alternative that must be forgone to pursue a certain action. Put differently, the benefits you could have received by taking an alternative action.

WACC

Weighted Average Cost of Capital, the average rate of return a company is expected to pay to all its security holders, including equity and debt.

Calculate

The act of determining a value or amount by mathematical means, often to analyze financial or statistical data.