A Firm's Long-Run Average Cost Curve Represents the Minimum Cost

question 223

True/False

A firm's long-run average cost curve represents the minimum cost of producing each level of output when the scale of production can be adjusted.

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Definitions:

MPC

Marginal Propensity to Consume, the proportion of an increase in income that gets spent on consumption.

Multiplier Effect

The phenomenon where an initial increase in spending leads to a larger increase in income and consumption within the economy.

Net Exports

The value of a country's total exports minus its total imports, representing the net trade balance.

MPC

The Marginal Propensity to Consume, representing the proportion of any additional income that a consumer spends on goods and services, as opposed to saving it.