Each Potential Short-Run Average Total Cost Curve Is Tangent to the Long-Run

question 171

Multiple Choice

Each potential short-run average total cost curve is tangent to the long-run average cost curve at:

• A) the level of output that minimizes short-run average total cost.
• B) the minimum point of the average total cost curve.
• C) the minimum point of the long-run average cost curve.
• D) a single point on the short-run average total cost curve.

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Definitions:

Present Value

The value today of a sum of money or sequence of cash flows expected in the future, calculated using a designated interest rate.

Contingent Liabilities

Possible obligations that might arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more future events.

U.S. GAAP

Generally Accepted Accounting Principles in the United States, a framework of accounting standards, principles, and procedures.

Current Liabilities

Short-term financial obligations that a company is expected to pay within one year or one operating cycle, whichever is longer.