Suppose for Some Firm That Average Total Cost Is Minimized

question 215

Multiple Choice

Suppose for some firm that average total cost is minimized at Q₁ units of output. For a monopolistically competitive firm in long-run equilibrium, Q₁

• A)is also the level of output at which marginal cost equals average total cost.
• B)exceeds the level of output at which there is a point of tangency between the demand curve and the average total cost curve.
• C)exceeds the level of output at which marginal revenue equals marginal cost.
• D)All of the above are correct.

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Definitions:

Accounts Payable

Liabilities of a company or an individual due to creditors for goods and services received but not yet paid for.

Earnings Per Share

A measure of a company's profitability that is calculated by dividing its net earnings available to common shareholders by the average outstanding shares.

Common Stock

Represents equity ownership in a corporation, providing voting rights and entitling the holder to a share of the company's success through dividends and/or capital appreciation.

Fixed Asset Turnover

A financial ratio that measures a company's effectiveness in generating sales from its fixed assets.