If Factor Prices Decrease

question 5

Multiple Choice

If factor prices decrease,

• A) there will be a downward shift in the long- run average cost curve but not in the short- run average cost curve.
• B) a firm will move down along both its long- run and short- run average cost curves.
• C) both the long- run and short- run average cost curves will shift downward.
• D) a firm will move down along its long- run average cost curve only.
• E) there will be no change in the cost curves in the long run.

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Definitions:

Cost Accounting

The method of accounting that focuses on capturing a company's total cost of production by assessing its variable and fixed costs.

Managerial Accounting Report

A document that provides detailed financial information intended to help managers in decision-making processes.

Operating Costs

Expenses associated with running a business's core activities, excluding the cost of goods sold.

Planning

A phase of the management process whereby objectives are outlined and courses of action determined.