When a Firm's Demand Curve Is Tangent to Its Average

question 44

Multiple Choice

When a firm's demand curve is tangent to its average total cost curve,the

• A) firm's economic profit is zero.
• B) firm may be earning economic profits.
• C) firm must be operating at its efficient scale.
• D) Both a and c are correct.

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Definitions:

Level of Confidence

The degree to which one can be sure that a particular parameter falls within a specific range, expressed as a percentage.

Confidence Interval

A range of values, derived from sample data, that is likely to contain the true value of an unknown population parameter.

Inferential Statistics

The branch of statistics that makes predictions or inferences about a population based on a sample of data.