Long-Run Average Cost Is Defined As

question 11

Multiple Choice

Long-run average cost is defined as:

• A)the minimum average cost of producing any level of output when all inputs are variable.
• B)the minimum average cost of producing any level of output when the amount of capital is varied and all other inputs are held constant.
• C)the average of the short-run costs associated with each amount of capital employed by the firm.
• D)the minimum average cost of producing any level of output when all inputs are fixed.

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Definitions:

Weekly Wage Rate

The amount of money that an individual earns in one week for their labor.

Labor Supply Curve

A graphical representation showing the relationship between the quantity of labor that workers are willing to supply and the wage rate.

Marginal Cost

The increase or decrease in the total cost that arises from producing one additional unit of a good or service.

Weekly Wage Rate

The amount of compensation a worker receives on a weekly basis for their labor or services.