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:

Future Value

The value of an investment or loan at a specific future date, considering interest or return earned over time.

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.

Future Value

The estimated value of an investment at a specific date in the future, considering interest or growth over time.

Compounded Semiannually

Refers to the process where interest is calculated and added to the principal amount of an investment or loan twice a year.