The Long-Run Average Cost Curve

question 385

Multiple Choice

The long-run average cost curve

• A) is always a downward sloping straight line.
• B) is a curve which is tangent to each member of a set of short-run average cost curves.
• C) is identical to the marginal cost curve.
• D) should always be horizontal.

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Definitions:

Indifference Curves

Graphical representations of all the combinations of goods and services that provide equal satisfaction to a consumer.

Income

The monetary return or earnings received by an individual or entity, often measured on a regular basis, such as monthly or annually.

Consumption Bundle

A combination of goods and services that a consumer chooses to consume given their budget constraints.

Utility Function

A mathematical representation of how consumers rank different bundles of goods according to their level of satisfaction or utility.