Long-Run Average Cost Is Never Greater Than Short-Run Average Cost

question 38

Multiple Choice

Long-run average cost is never greater than short-run average cost because in the long run,

• A) capital costs equal zero.
• B) the firm can move to the lowest possible isocost curve.
• C) wages always increase over time.
• D) wages always decrease over time.

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Definitions:

Amount of Checks

The total monetary value represented by checks issued or received by an individual or business.

Uncollectible Account

A receivable that is considered uncollectible from a debtor, usually leading to it being written off as a bad debt expense.

Accounts Receivable

Amounts due from customers to a business for products or services already received but not paid for.

Treasury Stock

Shares that were once in circulation and have been bought back by the issuing company, reducing the amount of outstanding stock.