A Firm Is Producing Output Less Than the Output Associated

question 364

Multiple Choice

A firm is producing output less than the output associated with the minimum point on the firm's short run average variable cost curve. At this level of output the firm uses its fixed capital input ________ and its variable labor input ________.

• A) at the lowest average cost; at the lowest average cost
• B) at the lowest average cost; at a level higher than the lowest average cost
• C) at a level higher than the lowest average cost; at the lowest average cost
• D) at a level higher than the lowest average cost; at a level higher than the lowest average cost

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Definitions:

Property Plant and Equipment

Long-term assets used in the operations of a business, not intended for sale, including land, buildings, and machinery.

Investing Activities

Financial transactions involving the purchase and sale of long-term assets and investments not included in cash equivalents.

Financing Activities

Cash flow activities related to changes in the size and composition of the equity capital and borrowings of an entity.

Cash Receipts

The total amount of money received by a business during a specific period.