The Long Run Average Cost Curve

question 103

Multiple Choice

The long run average cost curve

• A) is the sum of a firm's short run average cost curves.
• B) shows the lowest average cost facing a firm as it increases output changing both its plant and labor force.
• C) initially rises when output increases and then falls when output increases.
• D) always falls as output increases.
• E) always rises as output increases.

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Definitions:

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its operational, investing, and financing activities.

Operating Activities

The core activities that a business performs to earn revenue, including production, distribution, and sales processes.

Indirect Method

A technique used in cash flow statements to calculate net cash flows from operating activities by starting with net income and adjusting for non-cash transactions and changes in working capital.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset over its useful life.