-Refer to Figure 8

question 63

Multiple Choice

-Refer to Figure 8.6,which shows a firm's short-run average cost curves for three different levels of capital.Which of the following statements about short-run and long-run marginal cost is true?

• A) Long-run marginal cost equals short-run marginal cost at 50 units of output
• B) Long-run marginal cost equals short-run marginal cost at 130 units of output
• C) Long-run marginal cost equals short-run marginal cost at 160 units of output
• D) Long-run marginal cost and short-run marginal cost are never equal

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Definitions:

Probability Distribution

A probability distribution is a statistical function that describes all the possible values and likelihoods that a random variable can take within a given range.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project, calculating the net difference between present value of cash inflows and outflows over a period.

IRR

Stands for Internal Rate of Return, a metric used in financial analysis to estimate the profitability of potential investments.

Scenario Analysis

A process of analyzing possible future events by considering alternative possible outcomes (scenarios).