Which of the Following Is True in the Short Run

question 130

Multiple Choice

Which of the following is true in the short run at the output level where average total cost is at its minimum?

• A)Marginal cost equals average total cost.
• B)Average variable cost equals fixed cost.
• C)Marginal cost equals average variable cost.
• D)Average total cost equals average fixed cost.
• E)Average total cost equals average variable cost.

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Definitions:

Concentration Ratio

A measure of the market share controlled by the largest firms within an industry, used to indicate the degree of market competition.

Market Share

The percentage of an industry's sales that a particular company controls.

Herfindahl-Hirschman Index

A measure of market concentration used to determine the level of competition within an industry, calculated by summing the squares of the market shares of all firms in the market.

Marginal Revenue

The additional income that is gained from selling one more unit of a good or service, crucial for businesses when deciding how much to produce.