The Long-Run Average Cost Curve Is U-Shaped Because of Which

question 116

Multiple Choice

The long-run average cost curve is U-shaped because of which of the following?

• A) decreasing marginal returns as more labor is hired
• B) constant fixed costs as output is increased
• C) economies and diseconomies of scale
• D) increasing marginal returns as more labor is hired
• E) decreasing average fixed costs as output is increased

---

Definitions:

LIFO Method

An inventory valuation method that assumes the last items placed in inventory are the first sold during an accounting year.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and overhead.

Weighted-Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving more weight to some numbers than others.