Which of the Following Firms Is Least Likely to Use

question 31

Multiple Choice

Which of the following firms is least likely to use process costing?

• A)A yogurt manufacturer.
• B)A refiner of petroleum products.
• C)A machine tool manufacturer.
• D)A manufacturer of concrete products.

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Definitions:

Decreasing-Cost Industry

An industry in which the average cost of production decreases as the industry grows and output increases.

Decreasing Returns to Scale

A situation in which a proportional increase in all inputs leads to a less than proportional increase in output, indicating reduced efficiency as scale of production expands.

Long-Run Equilibrium

A state in which all factors of production and inputs can be adjusted by firms, leading to a situation where no firm has an incentive to change its output or production method.

LRAC Curve

Long-Run Average Cost Curve, a graphical representation showing the minimum cost at which any output level can be produced in the long run.