A Short-Run Average Total Cost Curve and a Long-Run Average

question 135

Multiple Choice

A short-run average total cost curve and a long-run average cost curve are tangent

• A)where the short-run cost curve is downward sloping.
• B)where the short-run cost curve is upward sloping.
• C)when the plant size is at the optimal level for that level of output.
• D)where the short-run cost curve is downward sloping and the plant size is optimal.
• E)by coincidence.

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Definitions:

Acquisition Method

A set of procedures used in accounting to consolidate the financial statements of a parent company and its subsidiaries.

Consolidated Revenues

The total earnings generated by a company and its subsidiaries, reported together as a single figure.

Partial Equity Method

The partial equity method is an accounting approach used when an investing company has significant influence, but not full control, over an investee, recognizing income to the extent dividends are received.

Goodwill

An intangible asset that arises when a company acquires another business for more than the fair value of its net identifiable assets.