Which of the Following Is True in the Short Run

question 118

Multiple Choice

Which of the following is true in the short run?

• A)MC = ATC at the lowest point of ATC.
• B)MC = AVC at the lowest point of AVC.
• C)When AVC is at its minimum point, ATC is falling.
• D)When ATC is at its minimum point, AVC is rising.
• E)All of the above are true.

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Definitions:

Equity Securities

Financial instruments that signify an ownership position in a publicly-traded corporation, such as stocks.

Long-Term Investments

Assets that a company intends to hold for more than one fiscal year, including stocks, bonds, real estate, and other securities.

Preferred Shares

A class of ownership in a corporation that provides a higher claim on assets and earnings than common shares; dividends must be paid on these shares before any can be distributed to common shareholders.