When a Firm's Long-Run Average Cost Curve Is Horizontal for a Range

question 251

Multiple Choice

When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays

• A)increasing returns to scale.
• B)constant returns to scale.
• C)decreasing returns to scale.
• D)constant average fixed costs.

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Definitions:

Markup Percent

The percentage increase between the cost of a product and its selling price, indicating the gross margin.

Fireproof Safe

A secure storage unit designed to protect contents from fire damage up to certain temperatures or for a specified duration.

Cubic Inch

A unit of volume measurement in the Imperial and United States customary systems, equivalent to the volume of a cube with each side being one inch long.

Dollar Markup

The difference between the selling price of an item and its cost expressed in dollars, representing the retailer's gross profit.