If a Firm Has a U-Shaped Long-Run Average Cost Curve

question 199

Multiple Choice

If a firm has a U-shaped long-run average cost curve,

• A) its fixed cost rises as output rises.
• B) it must have increasing returns to scale at low levels of production and decreasing returns to scale at high levels of production.
• C) it must have increasing returns to each input at low levels of production and decreasing returns to each input at high levels of production.
• D) the firm can maximize its output by operating at the point of minimum long-run average cost.

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Definitions:

Depression

A mental health issue involving a perpetual state of sorrow or disinterest in engaging activities, markedly interfering with daily existence.

Ethical Standards

Principles that govern behavior based on notions of right and wrong.

Variables

Elements, features, or factors that are liable to vary or change.

Sample Size

The number of participants or observations included in a study, which can affect the reliability and validity of the research results.