When Long-Run Average Costs Rise as Output Increases, the Firm

question 103

Multiple Choice

When long-run average costs rise as output increases, the firm is experiencing

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

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Definitions:

Canadian Dollars

The currency of Canada, represented by the symbol CAD, and used throughout the country for financial transactions.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.

Appreciate

The increase in value of an asset over time.

Canadian Dollar

The official currency of Canada, symbolized as CAD and often referred to as the "loonie."