Long-Run Average Cost Is Never Greater Than Short-Run Average Cost

question 38

Multiple Choice

Long-run average cost is never greater than short-run average cost because in the long run,

• A) capital costs equal zero.
• B) the firm can move to the lowest possible isocost curve.
• C) wages always increase over time.
• D) wages always decrease over time.

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Definitions:

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean, indicating how spread out the data points are.

Emergency Calls

Phone calls made to emergency services, such as police, fire brigade, or medical services, requesting immediate assistance.

Workshift

A scheduled period of time during which an individual is expected to perform work duties.

Expected Value

The anticipated mean or average value of a random variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence.