The Long-Run Average Cost (LRAC)curve Shows

question 72

Multiple Choice

The long-run average cost (LRAC) curve shows

• A)the lowest unit cost at which the firm can produce a given output.
• B)the highest unit costs of producing a given output.
• C)the operation of the law of diminishing returns.
• D)what happens to the fixed costs in the long run.
• E)the same as the short-run average cost curve.

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Definitions:

Economists

Professionals who study how societies use available resources to produce valuable commodities and distribute them among different people.

Money Supply

The total amount of money available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Monetary Policy

A strategy used by a country's central bank to control the money supply and interest rates in order to influence economic activity.

Aggregate Demand

The total demand for all goods and services in an economy at a given time and price level.