If There Is a Fall in All Factor Prices Faced

question 59

Multiple Choice

If there is a fall in all factor prices faced by a firm,

• A) there will be a downward shift in the long- run average cost curve but not in the short- run average cost curve.
• B) there will be no change in the cost curves in the long run.
• C) the firm will move to a lower point on both its long- run and short- run average cost curves.
• D) the firm will move to a lower point on its long- run average cost curve only.
• E) both the long- run and short- run average cost curves will shift downward.

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Definitions:

Fossil Fuels

Natural fuels such as coal, oil, and natural gas, formed from the decomposed remains of ancient plants and animals, used for energy.

Minerals

Naturally occurring, inorganic solids with a definite chemical composition and a crystalline structure found in the earth.

Earth Layers

The division of the interior of Earth into layers, including the crust, mantle, outer core, and inner core, based on chemical and physical properties.

Water Vapour

The gaseous phase of water present in the atmosphere, instrumental in the greenhouse effect and weather patterns.