Consider the Long-Run Average Cost Curve for a Firm

question 8

Multiple Choice

Consider the long-run average cost curve for a firm.Any point representing a cost and output combination that is below the LRAC curve

• A)may represent actual cost and production levels in the short run.
• B)represents less efficient cost levels than points on the long-run average cost curve.
• C)is attainable only when all factors are variable.
• D)represents unattainable cost levels,given current technologies.
• E)is attainable if the firm minimizes its costs according to the "principle of substitution."

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Definitions:

Quantity Sold

The total number of units of a product or service sold in a given period.

Price Floor

A minimum price set by the government or other authority, below which a product or service cannot be sold.

Legal Minimum

The lowest allowed wage, price, or level for something as established by law or regulation, often applied to wages.

Good Sold

The term refers to merchandise or items that a company sells to its customers.