Which of the Following Statements Concerning Long-Run and Short-Run Cost

question 98

Multiple Choice

Which of the following statements concerning long-run and short-run cost curves is correct?

• A)A short-run average cost curve can fall below the long-run average cost curve.
• B)The short-run average cost curve is tangent to the long-run average cost curve for all levels of output of the fixed factor.
• C)The long-run average cost curve envelops a whole family of short-run marginal cost curves.
• D)The minimum point of the long-run average cost curve will correspond to the minimum point on a single short-run average cost curve.
• E)Both the long-run and short-run average cost curves show the lowest cost of producing any output when all factors are variable.

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Definitions:

Basic Money Supply

The total amount of liquid money available in the economy, including cash and easily accessible deposits.

M1

A category of the money supply that includes physical currency and coin, demand deposits, traveler's checks, and other liquid assets accessible for immediate spending.

Financial Intermediaries

Institutions that facilitate the channeling of funds between lenders and borrowers by accepting funds from lenders and loaning funds to borrowers.

Insurance Premiums

Payments made by individuals or businesses to insurance companies to cover the cost of insurance policies.