If Your Firm's Production Function Has Constant Returns to Scale

question 46

Multiple Choice

If your firm's production function has constant returns to scale and you increase all your inputs by 60%,then your firm's output will

• A)not change.
• B)increase,but by less than 60%
• C)increase by 60%
• D)increase by more than 60%.

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Definitions:

Contingent Consideration

Payment in an acquisition that is dependent on specific future events possibly occurring, such as meeting performance targets.

Contingent Consideration

An additional payment that the buyer agrees to make to the seller in a business acquisition, which is dependent on specific future events or performances.

Fair Value

An estimate of the price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.

Liability

A financial obligation or debt owed by a company to another entity.