A Short- Run Average Total Cost Curve and a Long-

question 8

Multiple Choice

A short- run average total cost curve and a long- run average cost curve are tangent

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

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Definitions:

Potential Loss

The possible financial harm or loss a business could suffer due to unforeseen events or risks.

Investment

The allocation of resources, usually money, in expectation of earning a return or some form of benefit in the future.

Net Income

The net income of a company, calculated by deducting all expenditures and taxes from the total revenue.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.