A firm's long-run average cost curve is
A) the locus of points representing the minimum unit cost of producing any given rate of output when all inputs may be adjusted.
B) the locus of points made up of the minimum point on each short-run average total cost curve when only one input may be adjusted.
C) the envelope of the firm's variable cost curves.
D) identical to the lowest short-run average cost curve the firm has.
Answer: A
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Which of the following will cause the marginal cost curve of making cigarettes to shift?
A) a $5 million penalty charged to each cigarette maker B) a $1 per pack tax on cigarettes C) a $1 million advertising campaign by the American Cancer Society D) All of the above.
How do constraints affect our choices?
Corporate culture can be a strategic asset if it
A) adds value. B) adds value and can be duplicated. C) adds value and cannot be duplicated. D) can be franchised.
As capacity utilization in an economy rises:
a. firms sell their fixed assets to remain solvent. b. the gap between the potential output and actual output widens. c. firms reduce their demand for labor. d. employment of inputs by firms declines. e. firms add more factories and machines and increase output.