When a Plant Is Operating at the Level of Output

question 116

Multiple Choice

When a plant is operating at the level of output where its short-run average total cost is at its minimum,

• A)average fixed cost is at a minimum.
• B)marginal cost is at a minimum.
• C)average variable cost is at a minimum.
• D)the plant is operating at its capacity.
• E)more of the variable factor of production should be employed.

---

Definitions:

Option Contract

A financial derivative that provides the buyer the right, but not the obligation, to buy (call) or sell (put) an underlying asset at a predetermined price within a specific time period.

Hedge Risk

The strategy of minimizing potential financial losses or gains by using financial instruments or other measures.

Option Contract

A financial instrument allowing the owner the choice, but not the requirement, to purchase or sell a certain asset at an agreed price during a designated period.

Speculate

The action of investing in financial assets with high risk in the hope of achieving high returns.