A Long-Run Total Cost Curve

question 22

Multiple Choice

A long-run total cost curve:

• A)always has a constant slope.
• B)is always upward sloping.
• C)never has a constant slope.
• D)is always downward sloping.

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Definitions:

Planning Horizon

The future time period over which plans are made and resources are allocated.

High-Low Method

A method of separating a mixed cost into its fixed and variable elements by analyzing the change in cost between the high and low activity levels.

Fixed Component

A portion of the total costs that remains unchanged regardless of the level of activity or production volume.

Lubrication Cost

An expense category covering the costs associated with the lubrication of machinery and equipment to ensure smooth operation.