(Figure: Long-Run and Short-Run Average Cost Curves)Use Figure: Long-Run and Short-Run

question 187

Multiple Choice

(Figure: Long-Run and Short-Run Average Cost Curves) Use Figure: Long-Run and Short-Run Average Cost Curves.If a firm faced the long-run average total cost curve shown in the figure and it expected to produce 100,000 units of the good in the long run,the firm should build the plant associated with: Ref 11-18 Figure: Long-Run and Short-Run Average Cost Curves

• A)ATC₁.
• B)ATC₂.
• C)ATC₃.
• D)ATC₁ or ATC₂.

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Definitions:

NPV

Net Present Value represents a technique for assessing the profitability of a project or investment, utilized in the process of capital budgeting.

Cash Flow

The total amount of money being transferred into and out of a business, capturing the company's operational, investing, and financing activities.

Cost Of Capital

The minimum return rate a company needs to achieve on its investments to preserve its market valuation and draw in financing.

Cash Flow

The total sum of cash and cash-like assets moving in and out of a company.