Exhibit 6-16 Long-run average cost curves
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Which firm in Exhibit 6-16 displays a long-run average cost curve with economies of scale throughout the range of output shown?
A. Firm A.
B. Firm B.
C. Firm C.
D. Firms A and B.
Answer: C
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Property and casualty insurance companies hold the largest share of their assets in
A) long-term government bonds. B) short-term government securities and commercial paper. C) tax-exempt municipal bonds and U.S. government securities. D) medium-term corporate bonds.
When a firm has the power to establish its price
A) P = MR. B) P = MC. C) P > MR. D) P < MR.
If there is persistent inflation
A) long-run aggregate supply is growing at a faster rate than aggregate demand. B) long-run aggregate supply is growing at a slower rate than aggregate demand. C) there is an excess of total planned expenditures. D) long-run aggregate supply is constant.
With a natural monopoly, the minimum price a single firm must charge to make a profit:
A. is half the price two or more firms would have to charge. B. is equal to the price two or more firms would have to charge. C. is lower than the price two or more firms would have to charge. D. is always higher than the price two or more firms would have to charge.