Where Long-Run Average Cost Equals Short-Run Average Cost

question 48

Multiple Choice

Where long-run average cost equals short-run average cost:

• A) short-run average cost is minimized.
• B) long-run average variable cost equals short-run average variable cost.
• C) long-run average cost equals long-run marginal cost.
• D) long-run average cost is minimized.
• E) long-run marginal cost equals short-run marginal cost.

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Definitions:

Responsibility Accounting System

A system of accounting that tracks financial performance and costs at the level of individual responsibility centers, encouraging managerial accountability.

Direct Expenses

Expenses directly linked to a specific product, service, or project, like materials and work.

Profit Center

A business unit or division that is responsible for generating its own revenue and profit, often evaluated independently of other units.

Controllable Costs

Costs that can be influenced or managed by decisions made by a specific level of management or segment of a business.