Essay
Which of the following assumptions do we make when constructing long-run cost curves? Answer
(i) Factors prices are given.
(ii) The firm experiences economies of scale.
(iii) The state of technology is given.
(iv) The MPP/P ratios for all factors are equal.
(v) All factors are variable.
(vi) Firms will choose the least-cost factor combination.
(vii) There are no fixed factors of production.
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(i) Factors prices are given. True
(ii) ...View Answer
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(ii) ...
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