How Are a Firm's Short-Run and Long-Run Average Cost Curves

question 58

Multiple Choice

How are a firm's short-run and long-run average cost curves related?

• A) SRAC is greater than LRAC,which forces the LRAC curve to be upward sloping.
• B) SRAC and LRAC slope up or down together,but SRAC is always the steeper of the two curves.
• C) The SRAC curve is tangent to and lies above the LRAC curve.
• D) The LRAC curve just touches the SRAC curve at its minimum point.

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Definitions:

Scrutiny

The act of closely examining or inspecting something to ensure accuracy, authenticity, or conformance to standards.

Competition

The rivalry among businesses or individuals for customers, market share, or achievements.

Per Se Approach

A legal standard that deems certain actions to be inherently illegal without needing to prove harm or anticompetitive effects.

Fixed Price

An agreed upon price for goods or services that is not subject to change under normal circumstances.