The Table Given Below Shows the Average Total Cost of Production

question 98

Multiple Choice

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5

-Diseconomies of scale:

• A)occur only in the short run.
• B)occur when at least one resource is fixed and unit costs decrease as the quantity of production increases.
• C)occur when at least one resource is fixed and unit costs increase as the quantity of production increases.
• D)are represented by the upward-sloping portion of the short run average total cost curve.
• E)occur when all resources are variable and unit costs increase as the quantity of production increases.

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Definitions:

Residual Income

The income that remains after deducting all required costs of capital from operating profits, often used to assess divisional or project performance.

Average Total Assets

A financial metric calculated by averaging a company's total assets at the beginning and end of the accounting period.

Operating Expenses

Costs associated with the day-to-day functions of a business, excluding direct production costs, such as rent, utilities, and payroll expenses.

Profit Centers

Individual departments or divisions within a company that are responsible for generating their own revenue and profits.