Which of the following statements regarding a firm's long-run average total cost (LRATC) curve and its short-run average total cost (SRATC) curve is true?
A) The LRATC shows the lowest cost at which a firm is able to produce a given level of output when no inputs are fixed.
B) The contribution of average fixed cost to LRATC is greater than its contribution to SRATC.
C) The shape of the LRATC is affected by the law of diminishing returns.
D) The SRATC, but not the LRATC, can be used by a firm's managers for planning.
A
You might also like to view...
Explain how price expectations can affect the supply of a product
What will be an ideal response?
What is pricing to market? Where is it most prevalent?
What will be an ideal response?
"Senior citizens deserve an income that will allow them to live in comfort for their remaining years." This is
a. neither a normative nor a positive statement b. both a positive and a normative statement c. strictly a macroeconomic issue d. a positive statement e. a normative statement
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward