The Shape of a Firm's Long-Run Average Cost Curve Is

question 29

Multiple Choice

The shape of a firm's long-run average cost curve is determined by

• A)the degree to which each input encounters diminishing marginal productivity.
• B)the underlying nature of the firm's production function when all inputs are able to be varied.
• C)how much the firm decides to produce.
• D)the way in which the firm's expansion path reacts to changes in the rental rate on capital.

---

Definitions:

Insurance Policy

A contract between an insurer and a policyholder in which the insurer agrees to pay for specified losses in exchange for a premium.

Probability

A measure of the likelihood that an event will occur, often expressed as a fraction or percentage.

Independent Events

Events for which the occurrence of one does not affect the likelihood of occurrence of any of the others.

Public Transportation

A system of vehicles such as buses and trains that operate at regular times on fixed routes and are available for use by the public.