Figure 8-11 Figure 8-11 Illustrates the Long-Run Average Cost Curve

question 171

Multiple Choice

Figure 8-11
Figure 8-11 illustrates the long-run average cost curve for a firm that produces picture frames. The graph also includes short-run average cost curves for three firm sizes: ATCₐ, ATCb and ATCc.
-Refer to Figure 8-11.For output rates greater than 20,000 picture frames per month

• A) the firm will not make a profit because the average cost of production will be too high.
• B) the firm will experience diseconomies of scale.
• C) the firm will experience diminishing returns.
• D) the short-run average total cost will equal the long-run average total cost of production.

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Definitions:

Regional Land Elevation

The average height of the land surface of a specific area relative to sea level, which can influence climate, vegetation, and human settlement.

Erosion

The process by which natural forces remove soils, rocks, or dissolved material from one location on the Earth's crust, then transport it to another location.

Heating

The process of increasing the temperature of a substance or space, which can lead to changes in state, reactions or expansions.

Crust

The outermost layer of the Earth, comprising continental and oceanic crust and characterized by a composition distinct from the underlying mantle.