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alexandr1967 [171]
3 years ago
10

Many mining and mineral extraction processes tend to exhibit increasing returns to scale. Suppose copper mines have increasing r

eturns, and the existing copper mines reduce their capital and labor inputs by 25 percent in response to a global recession. What is the expected impact on copper output
Business
1 answer:
IrinaK [193]3 years ago
6 0

Answer: D) Output decreases by more than 25 percent

Explanation:

When a firm is said to be experiencing Increasing Returns to Scale, it means that for every additional unit of a factor of production, the firm experiences a higher increase in production than the additional unit. For example, if a Firm's output increases by 1.5 every time they hire an extra worker, the firm is said to be going through Increasing Returns to Scale.

With that same logic, if factors of production were reduced, the company undergoes a reduction in output that is bigger than the reduction in the factor of production.

For this reason, option D is correct in saying that Output decreases by more than 25 percent.

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Doubling the circumference of an oil pipeline more than doubles the volume of oil that can be pumped through. This strategy is c
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Answer:

Economies of scale

Explanation:

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3 years ago
Company J must choose between two alternate business expenditures. Expenditure 1 would require a $80,000 cash outlay and Expendi
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Answer:

A. 25%

B. 50%

C. 48000 after tax cash flow

Explanation:

a. lets assume marginal tax rate is X%

After tax cash flow of 80000 should equal to 60000$

$80000 - [$80000*X%] = 60000$

80000*X% = 80000-60000

80000*X% =20000

X = 20000/80000

= 25%

b.

$80000 - [$80000*50%*x%] = 60000$

40000*x%=20000

x%=50%

c.

$80000- [$80000*x] = 60000 - [60000*50%*x]

80000-60000 = [80000*x] - [30000*x]

20000 = 50000x

x=40%

check

80000-40% =48000 after tax cash flow

60000*50%

=60000- [60000*50%*40%]

=48000 after tax cash flow

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