Suppose the Long-Run Cost Function Is C = 3q

question 93

Multiple Choice

Suppose the long-run cost function is C = 3q. What is the cost-output elasticity for this case?

• A) 1
• B) 3
• C) 1/3
• D) 2

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Definitions:

Straight-Line Depreciation

An approach to evenly spread the expense of an asset over its period of utility.

Working Capital

The gap between a firm's present assets and liabilities, showing its operational efficiency and ability to cover short-term obligations.

Operating Cash Inflow

Cash generated from a company's normal business operations.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, making it the simplest depreciation method.