Figure 7-13 -AC Is Lower in the Long Run Than in the Than

question 144

Multiple Choice

Figure 7-13
-AC is lower in the long run than in the short run because

• A)prices often fall, allowing savings on purchases.
• B)inputs can be combined more efficiently in the long run.
• C)over time the prices of all inputs tend to decrease.
• D)AFC falls with output over all ranges of output.

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Definitions:

IAS 36

An International Accounting Standard that prescribes the procedures for accounting for impairments of assets.

Amortized

The gradual reduction of a debt or capital cost over a period, especially through regular payments covering interest and part of the principal.

Intangible Assets

Non-physical assets owned by a business, such as patents, trademarks, copyrights, and goodwill, which have economic value due to their rights or advantages in business operations.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.