Any Firm That Has Economies of Scale Will

question 24

Multiple Choice

Any firm that has economies of scale will

• A)Try to spread production over many plants.
• B)Be able to produce at a lower unit cost as it increases production.
• C)Face an upward-sloping long-run average total cost curve.
• D)Prefer to produce a small amount of total industry output.

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Definitions:

Compounded Quarterly

The process of calculating interest on both the initial principal and accumulated interest over four periods within a year.

Economically Equivalent

A term describing financial items or situations that have the same value or effect when all factors are considered.

Scheduled Payment

A predetermined amount paid at regular intervals under the terms of a loan agreement.

Compounded Semi-annually

An interest calculation method where interest is added to the principal sum twice a year, affecting the total interest earned.