Which of the Following Statements Concerning Long-Run and Short-Run Cost

question 98

Multiple Choice

Which of the following statements concerning long-run and short-run cost curves is correct?

• A)A short-run average cost curve can fall below the long-run average cost curve.
• B)The short-run average cost curve is tangent to the long-run average cost curve for all levels of output of the fixed factor.
• C)The long-run average cost curve envelops a whole family of short-run marginal cost curves.
• D)The minimum point of the long-run average cost curve will correspond to the minimum point on a single short-run average cost curve.
• E)Both the long-run and short-run average cost curves show the lowest cost of producing any output when all factors are variable.

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Definitions:

Modular Design

The creation of an item in self-contained units, or modules, that can be combined or interchanged to create different products.

Operations Process

The series of actions and steps taken to provide a service or produce a product efficiently.