Why is the long-run average total cost (LRATC) curve called the planning curve?
The LRATC curve is often called a planning curve, because it represents the cost data relevant to the firm when it is planning policy relating to scale of operations, output, and price over a long period of time. At a particular time, a firm already in operation has a certain plant and must base its current price and output decisions on the costs with the existing plant. However, when the firm considers the possibility of adjusting its scale of operations, long-run cost estimates are necessary.
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The primary contribution of the theory of monopolistic competition is the rationale it provides for product differentiation and advertising
Indicate whether the statement is true or false
According to the World View article titled "The Way We Give: Philanthropy Can Step In Where Market Forces Don't," in which of the following ways does philanthropy not improve the market outcome?
A. Make novel arrangements with private companies. B. Draw in experts including universities. C. Give awards. D. Require firms to research new and improved health care solutions.
Which of the following would cause a rightward shift in the aggregate supply curve?
A. larger-than-expected wage increases B. lower oil prices C. increased investment spending D. greater government regulation
Some stores give “free” products to consumer. An economist would say the products are not free. Why the difference?
Please provide the best answer for the statement.