For Many Firms the LRAC Curve Is U-Shaped

question 46

Multiple Choice

For many firms the LRAC curve is U-shaped.The downward-sloping portion of the LRAC curve can be explained by

• A)economies of scale.
• B)the spreading of overhead.
• C)both A and B.
• D)declining prices of the fixed factor.
• E)decreasing short-run marginal cost.

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Definitions:

Limited Partnership

A form of partnership consisting of one or more general partners who manage the business and assume legal debts and obligations, and one or more limited partners who are liable only up to the amount they invest.

Limited Liability Partnership

is a partnership in which some or all partners have limited liabilities, protecting each partner's personal assets from debts and liabilities of the partnership.

Professional Partnership

A business organization formed by two or more professionals, such as lawyers or doctors, to provide services within their expertise.

Officers

Individuals appointed or elected to manage and direct the affairs of an organization, corporation, or governmental entity.