Exhibit 6-15 Long-Run Average Cost

question 88

Multiple Choice

Exhibit 6-15 Long-run average cost

Given the short-run average total cost curves in Exhibit 6-15, what level of output per week minimizes average total cost?

• A) 500 units.
• B) 1,000 units.
• C) 1,500 units.
• D) 2,000 units.

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Definitions:

Monopolistically Competitive

A commercial framework where numerous companies offer similar, yet not exactly identical, products, granting them some level of market influence and the ability to distinguish their offerings.

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded for it over a given period of time.

ATC

The total production cost per unit, calculated by dividing the entire cost of production by the number of products made.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and economic forces are balanced, leading to no net tendency for the market to change.