If Unit Costs Decrease as the Quantity of Production Increases

question 48

Multiple Choice

If unit costs decrease as the quantity of production increases and all inputs are variable, then a firm is experiencing

• A)constant returns to scale.
• B)economies of scale.
• C)diseconomies of scale.
• D)falling economies of scope.

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Definitions:

Constructed Structure

Man-made buildings or edifices created for specific purposes, ranging from residential, commercial, to infrastructural uses.

Noticeable Effect

An observable or measurable impact resulting from a specific action or phenomenon.

Evolution Timescales

The long periods over which evolutionary processes such as mutation, selection, and drift act, ranging from thousands to billions of years.

Natural Selection

The process by which organisms that are better adapted to their environment tend to survive and produce more offspring, a key mechanism of evolution.