The Long-Run Average Cost Curve

question 385

Multiple Choice

The long-run average cost curve

• A) is always a downward sloping straight line.
• B) is a curve which is tangent to each member of a set of short-run average cost curves.
• C) is identical to the marginal cost curve.
• D) should always be horizontal.

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Definitions:

Agricultural Subsidies

Financial support provided by the government to farmers to help stabilize food prices, ensure a steady supply of agricultural products, or directly increase farmers' incomes.

Misallocation Of Resources

The inefficient distribution or use of resources in an economy, leading to outcomes where goods or services are not produced at their highest valued use.

Free-Market Intent

The overarching aim or philosophy of allowing market forces of supply and demand to operate with minimal government intervention.

Agricultural Policy

A set of laws and regulations implemented by governments to stabilize agricultural markets, support farm income, and encourage agricultural production.