Assuming the Existence of Economies of Scale,if a Firm Finds

question 35

Multiple Choice

Assuming the existence of economies of scale,if a firm finds that it can reduce its unit cost by decreasing its scale of production,it means that

• A)it has too much production capacity relative to its demand.
• B)it should try to produce less.
• C)the law of diminishing returns has not taken effect.
• D)it has too much fixed overhead relative to its variable cost.

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Definitions:

Punitive Damages

Financial compensation awarded in a lawsuit that exceeds simple restitution and is intended to punish the defendant for egregious conduct and deter similar future behavior.

Medical Expenses

Costs incurred from medical care, treatment, or procedures, potentially including hospitalization, medication, and professional fees.

Nominal Damages

A small amount of money awarded to a plaintiff in a lawsuit when a legal wrong has been suffered but no substantial harm was done.

Tort

A legal wrong that causes harm or loss, leading to civil legal liability.