The Value Created by a Firm Is the Value Received

question 23

True/False

The value created by a firm is the value received by the customers for that firm's products,minus the real cost of producing the products.

---

Definitions:

Average Total Cost

The cost per unit is calculated by dividing the overall production cost by the quantity of units produced.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it shows the variable cost per unit of output.

Increasing Returns to Scale

A situation in production where doubling the inputs results in more than doubling the output, leading to efficiencies and economies of scale.

Decreasing Returns to Scale

A situation in which a firm experiences a less than proportional increase in output despite a proportional increase in all inputs, typically due to inefficiencies.