The Point of Tangency Between the Short-Run Average Total Cost

question 22

Multiple Choice

The point of tangency between the short-run average total cost (SRATC) curve and the long-run average cost (LRAC) curve occurs

• A)at the point of minimum SRATC.
• B)at a point where average total cost is falling but the marginal cost is rising.
• C)at a point where both the average total cost and the marginal cost are rising.
• D)at an output level for which the quantity of the fixed factor is optimal.
• E)only when the LRAC curve is at its minimum.

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Definitions:

Intangible Product

A product that cannot be touched or physically measured, often involving services or digital goods.

Management Activity

The range of actions, decisions, and responsibilities undertaken by managers to operate and control organizations.