Post Utme Pan Atlantic University 2018 Economics Question 8

Practice objective / multiple choice question 8 from the 2018 Post Utme Pan Atlantic University Economics examination.

Post Utme Pan Atlantic University 2018 Economics Objective / Multiple Choice
Question 8 POST_UTME_PAN-ATLANTIC_UNIVERSITY • 2018 • ECONOMICS • objective

U\sing the concept of returns to scale, explain why a firm's average \cost of production will decrease as it increases its production level.

Answer Options

Correct Answer A. The firm's average \cost of production will decrease as it increases its production level because the firm is experiencing increa\sing returns to scale.
B. The firm's average \cost of production will decrease as it increases its production level because the firm is experiencing decrea\sing returns to scale.
C. The firm's average \cost of production will decrease as it increases its production level because the firm is experiencing cons\tant returns to scale.
D. The firm's average \cost of production will not change as it increases its production level because the firm is experiencing cons\tant returns to scale.
Correct Answer
A
Correct Option:
The firm's average \cost of production will decrease as it increases its production level because the firm is experiencing increa\sing returns to scale.

About This Question

This is Post Utme Pan Atlantic University 2018 Economics Question 8. It is one of the objective questions from the 2018 Post Utme Pan Atlantic University Economics examination.

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