A Short- Run Average Total Cost Curve and a Long-

question 111

Multiple Choice

A short- run average total cost curve and a long- run average cost curve are tangent

• A)when the plant size is at the optimal level for that level of output.
• B)where the short- run cost curve is upward sloping.
• C)where the short- run cost curve is downward sloping.
• D)by coincidence.
• E)where the short- run cost curve is downward sloping and the plant size is optimal.

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Definitions:

Book Value Per Share

The equity available to common shareholders divided by the number of outstanding shares, indicating the value of a company's shares based on its financial statements.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operational costs, from its total revenue.

Dividend Payout Ratio

A financial metric that calculates the percentage of net income distributed to shareholders in the form of dividends.

Total Stockholders' Equity

The total net worth of a company according to its balance sheet, calculated as total assets minus total liabilities.