The Figure Given Below Shows Three Short Run Average Total

question 62

Multiple Choice

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3

-The long run is referred to as a planning horizon because:

• A)the firm has committed to a fixed quantity of at least one resource and the other resources are variable.
• B)the manager has selected the size of the firm that appears to be the least profitable and does not have the option of selecting any other plant size.
• C)the firm has not committed to a fixed quantity of any resource and has all options available to it.
• D)the manager has selected a scale of production.
• E)the firm is operating along a specific average-cost curve.

---

Definitions:

Lot Sizes

The quantity of units produced, purchased, or sold in a single operation or transaction, often optimized for efficiency in production and inventory management.

Product Changes

Modifications or improvements made to a product’s design, specifications, or features to enhance its performance, appeal, or compliance with regulations.

JIT Partnerships

Collaborations between suppliers and manufacturers that follow Just-In-Time inventory principles to reduce waste and increase efficiency.

Competitive Bidding

A procurement process where suppliers submit their bids to win a contract, based on price and/or other criteria.