Given the Exit Rule, a Firm's Long Run Supply Curve

question 67

Multiple Choice

Given the exit rule, a firm's long run supply curve is the section of the:

• A)average total cost curve to the right of its minimum.
• B)marginal cost curve that lies above the average total cost curve.
• C)marginal cost curve that lies above the average variable cost curve.
• D)average variable cost curve to the right of its minimum.

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Definitions:

Operating Income

Income earned from a firm's regular business operations, excluding deductions of interest and taxes.

Absorption Costing

A costing method where all manufacturing costs, including both fixed and variable costs, are attributed to the product, thus fully absorbing them.

Net Income

The profit of a company after all expenses and taxes have been deducted from total revenue.

Variable Manufacturing Costs

Costs that vary directly with the level of production, including expenses like raw materials and direct labor.