The long-run average total cost curve
a. is an envelope-shaped curve mapped out by the short-run average total cost curves for alternative plant sizes.
b. intersects the minimum point of each short-run average total cost curve for alternative plant sizes.
c. rises throughout its entire range when increasing returns are present.
d. falls throughout its entire range due to the law of diminishing returns.
A
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Fran runs a doughnut shop in a tiny 3-person town. The table below shows the quantity demand by the three townspeople at various prices.Price PerDoughnutQuantity Demandedby AlQuantity Demandedby BettyQuantity Demandedby Carol10 cents104625 cents92535 cents71550 cents504 When the price of a doughnut is 50 cents, what is the market demand for doughnuts?
A. 5 doughnuts B. 31 doughnuts C. 9 doughnuts D. 20 doughnuts
Taxes impact incentives to use resources since they distort relative prices
Indicate whether the statement is true or false
Which of the following is a drawback of FDIC insurance?
a. It leads to excess industry profits. b. It has failed to arrest the trend of bank failures. c. It leads to the problem of moral hazard. d. It undercuts private insurance companies.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C