Refer to the Graph Shown

question 77

Multiple Choice

Refer to the graph shown. A firm that produces 900 units of output using the plant size associated with SATC₂ minimizes:

• A)both long-run and short-run average total cost.
• B)long-run average total cost only.
• C)short-run average total cost only.
• D)neither long-run nor short-run average total cost.

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Definitions:

Days' Sales in Inventory

A measure of how quickly inventory is sold and replaced over a period, calculated by dividing the ending inventory by the cost of goods sold and multiplying by 365.

Year 2

Typically refers to the second year in a given time frame or study period, often used in financial analysis, forecasts, or planning scenarios.

Ending Inventory Balance

The value or quantity of goods available for sale or use at the end of an accounting period, after accounting for purchases and sales during the period.

Income Statement

An income statement is a financial statement that shows a company's revenues and expenses over a specific period, resulting in a net income or loss.