The LRAC Curve

question 149

Multiple Choice

The LRAC curve

• A) is the minimum points on all the short-run ATC curves.
• B) shows the lowest possible marginal cost of producing the different levels of output.
• C) shows the lowest attainable average total cost for all levels of output when all inputs can be varied.
• D) generally lies above the short-run ATC curves.

---

Definitions:

Price Standard

A predetermined cost that companies use to measure the variance between the expected and actual cost.

Materials Price Standard

A predetermined cost per unit of material, used as a benchmark to assess the efficiency and cost-effectiveness of the purchasing and usage of materials in production.

Matrix Approach

A management technique used to handle the complexity of multiple projects or tasks by organizing them into a matrix structure, considering both function and product.

Variance Analysis

The process of analyzing the difference between planned and actual numbers in order to find discrepancies and their causes.