Price Equals the Minimum of Long-Run Average Cost

question 399

Multiple Choice

Price equals the minimum of long-run average cost

• A) in a long-run equilibrium.
• B) in a short-run equilibrium as well as in a long-run equilibrium.
• C) whenever average revenue equals marginal cost.
• D) along a horizontal long-run supply curve, but not along an upward sloping long-run supply curve.

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Definitions:

Equity-Financed

A method of funding a company’s operations by issuing shares of stock to investors rather than borrowing money.

All-Stock Deal

A type of transaction where payment for a purchase is made entirely through the exchange of shares rather than cash.

Incremental Value

The additional worth or benefit gained from a specific action or investment, compared to the situation without it.

Equity-Financed

Describes investments or operations funded by raising capital through the sale of equity, or shares, rather than borrowing.