In the Transition from the Short Run to the Long

question 318

Multiple Choice

In the transition from the short run to the long run, the number of firms in a competitive industry is

• A)fixed.
• B)increasing at a constant rate.
• C)decreasing.
• D)able to adjust to market conditions.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of a good changes with different production levels.

Average Total Cost (ATC)

The average expense per unit of output, calculated by dividing the overall production cost by the amount of output generated.

Average Total Cost Curve

A graphical representation showing the average total cost of producing different quantities of a good or service.