-Refer to Figure 8

question 13

Multiple Choice

-Refer to Figure 8.6,which shows just three of a firm's various possible short-run average cost curves.Suppose the firm is currently producing 160 units at and average cost of $90 per unit.Which of the following statements is true?

• A) The firm could reduce its average cost by employing more capital
• B) The firm could reduce its average cost by employing less capital
• C) The firm is producing its output at the lowest possible long-run average cost
• D) The firm would increase its average cost if it used more capital

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Definitions:

Investing Activity

Operations concerning the buying and selling of long-term assets and other financial investments that do not qualify as cash equivalents.

Suppliers

Entities or individuals that provide goods or services to another entity or individual, usually in a business-to-business context.

Time Period Assumption

An accounting principle that the life of a business can be divided into discrete time periods, such as months and years, for reporting purposes.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell the goods, and collect cash from the sale.