d. that include oly lili e. that can be avoided in the short run without gulng W
ID: 1114317 • Letter: D
Question
d. that include oly lili e. that can be avoided in the short run without gulng Which of the following is most likely to be a variable cost? a. The payment for the raw materials used in manufacturing goods b. The interest payments on a loan used to finance the construction of a building c. The lease payment on a warehouse ns d. The opportunity cost of the heavy equipment installed in a factory e. The payment for the installation of new software otal variable costs: ic a. are the costs of short-run fixed capital equipment b. are so named because they vary from firm to firm within an industry. c. are costs that increase as production increases. d. are costs that decrease as production increases. e. are costs that are excluded by an economist while computing profits. co Constant returns to scale indicate that a firm experiences: a. decreasing per-unit costs of production as the scale of output expands. b. stable per-unit costs of production as the scale of output expands. c. increasing per-unit costs of production as the scale of output expands. d. increasing marginal product. e. increasing short-run costs of production as output expands. Vi When economies of scale exist, an increase in the level of output will lead to: a. a decrease in cost per unit b. an increase in cost per unit. c. a decrease in total cost. d. a decrease in profit per unit. e. a decrease in total revenue.Explanation / Answer
47. a. The payment for raw materials used in manufacturing .
Because raw material are input which are variable i.e it can be increased or decreased in short and long run.
48. c. are costs that increases as production increases.
Variable cost is one which increase with increase in quantity.
49. C, increasing per unit cost of production as scale of output expands.
Constant returns to scale means that if we increase output by 1 unit cost also increases by 1 unit .
50. a, a decrease in cost per unit.
Decreasing returns to scale means that as output increases cost per unit of output decreases.
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