Long-Run Average Cost Equals Long-Run Marginal Cost Whenever

question 36

Multiple Choice

Long-run average cost equals long-run marginal cost whenever:

• A) the production function exhibits constant returns to scale.
• B) fixed costs are zero.
• C) no factor always has increasing marginal returns.
• D) the cost of capital is near zero.
• E) long-run marginal cost is at its minimum.

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Definitions:

Product Supply

The total amount of a product or service that is available for purchase at any given time or price.

Oil Declines

A reduction in the price or availability of oil, often due to changes in supply, demand, or geopolitical factors.

Gasoline

A highly flammable liquid derived from petroleum, used primarily as fuel in internal combustion engines.

Quantity Demanded

Quantity demanded is the total amount of a good or service that consumers are willing and able to purchase at a given price over a specified period.