A long-run ATC curve shows:
A. the minimum average total cost possible for every possible size firm across an industry.
B. which size firm can capture the lowest costs per unit for an industry.
C. what size firms can capture economies of scale by expanding.
D. All of these are true.
D. All of these are true.
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Good X is an inferior good but not a Giffen good. When the price of X increases, the consumer will consume
a. more X. b. the same amount of X. c. less X. d. more or less X depending on the size of the income effect relative to the size of the substitution effect.
As output rises, average fixed cost __________.
Fill in the blank(s) with the appropriate word(s).
In order to maximize profit, a firm that produces its output in two plants will produce the level of total output at which the last unit of output produced adds the same amount to total revenue as to the
A. second plant's total cost. B. first plant's total cost. C. firm's total cost D. both a and b
The real interest rate can be estimated by:
A. subtracting the pure interest rate from the nominal interest rate. B. dividing the nominal interest rate by the consumer price index. C. subtracting the nominal interest rate from the rate of inflation. D. subtracting the rate of inflation from the nominal interest rate.