A Short-Run Average Total Cost Curve Will Touch the Long-Run

question 61

Multiple Choice

A short-run average total cost curve will touch the long-run average cost curve at a level of output only

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

---

Definitions:

Fundamental Analysis

An investment analysis approach that evaluates a security's intrinsic value by examining related economic and financial factors.

Intrinsic Value

The actual value of a company or an asset based on underlying perceptions of its true value including all aspects of the business.

Two-Stage Growth

A model for valuing a company by assuming two different rates of growth: an initial high-growth period followed by a lower, stable growth period.

Major Downturn

A significant decline in economic activity across markets or industries, often characterized by falling GDP, employment, and consumer spending.