A Constant-Cost Industry Is One in Which

question 375

Multiple Choice

A constant-cost industry is one in which

• A) output increases lead to productivity gains.
• B) the marginal product of labor is constant.
• C) there is no change in long-run per-unit costs, even as output varies.
• D) each firm has a horizontal long-run average cost curve.

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Definitions:

Investing Activities

Transactions involving the purchase and sale of long-term assets and investment securities, reflected in a company's cash flow statement.

Direct Method

A cost allocation approach directly assigning service department costs to producing departments without any intermediate steps.

Sales Adjusted

The revision of sales figures to account for returns, allowances for damaged goods, and discounts given.

Cash Basis

An accounting method where transactions are recorded when cash is received or paid, without regard to when the transactions occurred.