Which of the Following Statements Is True

question 91

Multiple Choice

Which of the following statements is true?

• A) If a firm is experiencing economies of scale, diminishing marginal product has not set in yet.
• B) No firm would ever operate at a level of output for which it experiences diseconomies of scale.
• C) A firm can experience diminishing marginal product and economies of scale at the same time.
• D) Diseconomies of scale is a short-run concept, while economies of scale is a long-run concept.

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Definitions:

Product Costs

Expenses directly associated with the manufacturing of a product, including materials, labor, and overhead.

Conversion Costs

The sum of labor costs and manufacturing overhead costs required to convert raw materials into finished products.

Factory Overhead

Indirect manufacturing costs that cannot be directly attributed to specific units produced, such as maintenance, utilities, and salaried personnel expenses.

Direct Labor

The expenditure on the pay of staff who are directly participating in the creation of products or services.