-Given the Market Demand and Cost Data in the Above

question 317

Multiple Choice

-Given the market demand and cost data in the above figure, the existence of two firms equal sized firms producing a total of 8 million cubic feet of natural gas means that the long-run average cost of producing natural gas is

• A) 10 cents per cubic foot.
• B) 20 cents per cubic foot.
• C) 30 cents per cubic foot.
• D) 40 cents per cubic foot.

---

Definitions:

Cash Inflows

Money received by a business from various sources including sales, investments, and financing.

Useful Life

The estimated period over which an asset is expected to be used by the entity, or be productive.

Salvage Value

The projected sell-on value of an asset upon reaching the end of its operational lifespan.

Useful Life

The estimated duration of time over which an asset is expected to be functional and generate revenue for its owner.