A Firm's Long- Run Average Cost Curve

question 56

Multiple Choice

A firm's long- run average cost curve

• A) tells the firm which plant size to use and which quantity of labour to use to minimise the cost of producing any level of output.
• B) is U- shaped.
• C) shows the lowest attainable average total cost of producing any level of output when the plant and labour are variable.
• D) All of the above.

---

Definitions:

Number Of Employees

A count of all individuals working for a company, including both full-time and part-time staff.

Step-down Method

A cost allocation method used in managerial accounting to allocate overhead costs from service departments to producing departments.

Labor Hours

The total number of work hours spent by employees on production or service delivery.

Space Occupied

The area taken up or used by a business, organization, or equipment within a physical location.