A Horizontal Long-Run Average Cost Curve Indicates

question 375

Multiple Choice

A horizontal long-run average cost curve indicates

• A) constant returns to scale.
• B) diseconomies of scale.
• C) constant marginal physical product.
• D) economies of scale.

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Definitions:

Incur a Loss

To experience a negative financial result from business operations, investments, or other economic activities.

Economic Profits

The difference between total revenue and total cost, including both explicit and implicit costs, representing the additional amount earned above the next best alternative.

Cable Subscriptions

Fees paid by consumers to access television services provided over cable infrastructure.

MC

Marginal Cost, which is the increase in total cost that arises from producing one additional unit of a good or service.