Higher Input Prices in Large Firms Might Lead to

question 31

Multiple Choice

Higher input prices in large firms might lead to

• A) horizontal marginal cost curves.
• B) downward-sloping marginal cost curves.
• C) downward-sloping long-run average cost curves.
• D) upward-sloping long-run average cost curves.

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Definitions:

Budget Line

An illustration showing all the different ways two products can be acquired using a certain amount of money, assuming the prices do not change.

Utility

A measure of the satisfaction or pleasure that individuals get from the consumption of goods and services.

Budget Line

A diagram illustrating every potential mix of two commodities that are affordable within a specific budget, considering their set prices.

Money Income

The total amount of monetary earnings received by an individual or household, including wages, salaries, bonuses, and other income sources before taxes.