In the Long Run a Company That Produces and Sells

question 311

Multiple Choice

In the long run a company that produces and sells candy bars incurs total costs of $1,200 when output is 2,400 candy bars and $1,400 when output is 2,900 candy bars. The candy bar company exhibits

• A)diseconomies of scale because total cost is rising as output rises.
• B)diseconomies of scale because average total cost is rising as output rises.
• C)economies of scale because total cost is rising as output rises.
• D)economies of scale because average total cost is falling as output rises.

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Definitions:

Accounting Record

Documented evidence of financial transactions, used to track, report, and audit financial movements.

Short-term Speculation

The practice of buying and selling securities, commodities, or other financial instruments with the aim of profiting from price fluctuations over a short period.

Purchase

This term relates to the process of acquiring goods or services in exchange for money, encompassing a wide range of consumer and business transactions.

Unrealized Loss

A loss that results from holding onto an asset that has decreased in price, not yet realized through selling.