The Firm's Long-Run Total Cost Is Given by LTC =

question 113

Multiple Choice

The firm's long-run total cost is given by LTC = 5,000Q - 100Q² + Q³, and its long-run marginal cost is given by LMC = 5,000 - 200Q + 3Q². At what output level is the firm subject to diseconomies of scale?

• A) Q > 30
• B) Q > 50
• C) Q > 245
• D) Q < 245

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, representing the profitability before deducting operating expenses.

Return On Total Assets

A financial ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets.

Return On Equity

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how well a company uses investments to generate earnings growth.

Net Profit Margin

A financial ratio indicating the percentage of revenue that remains as profit after all expenses are deducted.