A Short- Run Average Total Cost Curve Will Touch the Long-

question 30

Multiple Choice

A short- run average total cost curve will touch the long- run average cost curve at a level of output only

• A) when the quantity of the fixed factor being employed is at the optimal level for that level of output.
• B) where the short- run cost curve is downward sloping.
• C) by coincidence.
• D) where the short- run cost curve is downward- sloping and the quantity of the fixed factor is optimal.
• E) where the short- run cost curve is upward sloping.

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Definitions:

Widespread Costs

Expenses that are not confined to a single area or sector but are distributed broadly across multiple areas or throughout society.

Current Costs

Current costs refer to the expenses that a company incurs in its operations during the present time period, often contrasted with historical or fixed costs.

Future Benefits

The expected advantages or returns, typically economic, that are anticipated to be realized in the future.

Economic Theory

A framework of principles and models that explains how economies operate and how economic agents interact.