Multiple Choice
Which of the following statements regarding a firm's long-run average total cost (LRATC) curve and its short-run average total cost (SRATC) curve is true?
A) The shape of the LRATC is affected by the law of diminishing returns.
B) The SRATC, but not the LRATC, can be used by a firm's managers for planning.
C) The LRATC shows the lowest cost at which a firm is able to produce a given level of output when no inputs are fixed.
D) The contribution of average fixed cost to LRATC is greater than its contribution to SRATC.
Correct Answer:
Verified
Correct Answer:
Verified
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