Figure 8-5 -Refer to Figure 8-5.Suppose for the Past 8 Years the 8

question 63

Multiple Choice

Figure 8-5
-Refer to Figure 8-5.Suppose for the past 8 years the firm has been producing Qd units per period using plant size ATC4.Now,following a permanent change in demand,it plans to cut production to Qc units.What will happen to its average cost of production?

• A)In the short run,its average cost falls from $47 to $41,and in the long run,average cost falls even further to $37.
• B)In the short run,its average cost rises from $47 to $55,and in the long run,average cost falls to $41.
• C)In the short run,its average cost falls from $47 to $37,and in the long run,average cost rises to $41.
• D)In the short run,its average cost rises from $47 to $55,and in the long run,average cost falls to $37.

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Definitions:

Total Quality Management

A management approach focused on long-term success through customer satisfaction, involving all members of an organization in improving processes, products, services, and culture.

Strategic Objectives

Specific, measurable goals that an organization aims to achieve to realize its strategic vision and mission.

System Inputs

The necessary resources, data, or materials required by a system to produce outputs.

TQM

Total Quality Management, a management approach focused on continuous improvement of all organizational processes, products, and services.