Long-Run Cost Curves Are U-Shaped Because

question 163

Multiple Choice

Long-run cost curves are U-shaped because

• A)of the law of demand.
• B)of the law of diminishing returns.
• C)of economies and diseconomies of scale.
• D)of the law of supply.

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Definitions:

Constant Marginal Cost

A situation where the cost of producing an additional unit of output is the same, regardless of how many units are produced.

Profit-Maximizing

A strategy or point where a firm adjusts its production to achieve the highest possible profit, considering its costs and the market demand.

Monopolist

An economic agent who is the sole seller of a product or service in a market, with the power to influence prices.

Quantities

Specific amounts or numbers of items or substances.