The Point of Tangency Between the Short- Run Average Total

question 31

Multiple Choice

The point of tangency between the short- run average total cost (SRATC) curve and the long- run average cost (LRAC) curve occurs

• A) at a point where average total cost is falling but the marginal cost is rising.
• B) at the point of minimum SRATC.
• C) at a point where both the average total cost and the marginal cost is rising.
• D) only when the LRAC curve is at its minimum.
• E) at an output level for which the quantity of the fixed factor is optimal.

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Definitions:

Sample Mean

The average of a sample set of numbers, calculated by adding up all the numbers and dividing by the count of numbers in the set.

Sample Mean

The average value of a sample set of numbers.

Freshmen

First-year students in a secondary or post-secondary educational institution.

Probability

The evaluation of how probable an event is, shown as a numerical value between 0 and 1, where 0 stands for the event being impossible and 1 representing absolute certainty of the event occurring.