Assume That You Observe the Long-Run Average Cost Curve of ACME

question 82

Multiple Choice

Assume that you observe the long-run average cost curve of ACME Bookstores, a national chain.Starting from the point on the curve where output is zero and moving to the right, which of the following lists the behavior of long-run average costs in the correct sequence (that is, which will be observed first, second, etc.) ?

• A)minimum efficient scale; economies of scale; constant returns to scale; diseconomies of scale
• B)economies of scale; constant returns to scale; diseconomies of scale; minimum efficient scale
• C)constant returns to scale; economies of scale; minimum efficient scale; diseconomies of scale
• D)economies of scale; minimum efficient scale; constant returns to scale; diseconomies of scale

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Definitions:

Price Objectives

The goals a company aims to achieve regarding the pricing of its products or services, which can include maximizing profitability, increasing market share, or deterring competition.

Analyze Price Competitors

The process of examining the pricing strategies of competitors in the market to understand their impact on sales and positioning.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and insurance premiums.

Small

Referring to something of limited size, amount, or scale when compared to others of the same category.