The Long-Run Average Total Cost (LRATC) Curve

question 203

Multiple Choice

The long-run average total cost (LRATC) curve

• A) indicates the per-unit cost of producing various rates of output with a specific size of plant but variable levels of labor and technology.
• B) indicates the minimum per-unit cost that can be achieved at various output rates when the firm is free to choose among plant sizes.
• C) will be falling when diseconomies of scale are present and rising when economies of scale are present.
• D) is a U-shaped curve.
• E) is both a and d above.

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Definitions:

First Selection

The initial choice or decision made from a set of options or alternatives.

Simple Random Sample

A simple random sample of size n from a finite population of size N is a sample selected such that each possible sample of size n has the same probability of being selected.

Probability

An indicator of the probability that a particular event will take place, represented by a numerical value ranging from 0 to 1, with 0 meaning the event cannot happen and 1 meaning the event is certain to happen.

Population

Every individual or item under consideration in a statistical evaluation.