Exhibit 6-15 Long-Run Average Cost

question 50

Multiple Choice

Exhibit 6-15 Long-run average cost

-If the firm represented in Exhibit 6-15 is operating with a plant whose size corresponds to short-run average total cost curve A,the level of output that would minimize its short-run average total cost is:

• A) 500 units per week.
• B) 1,000 units per week.
• C) 1,500 units per week.
• D) 2,000 units per week.

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Definitions:

Capacity Utilization Rate

The percentage of a firm's total possible production output that is actually being achieved, indicating how efficiently resources are being used.

Gross Investment

Gross Investment refers to the total amount of money spent on new capital assets, before accounting for depreciation.

Expected Profit Rate

The forecasted return on investment, considering the potential profits and the likelihood of achieving them.

Loyal

The quality of being faithful or devoted to a person, country, group, or cause.