The long-run average cost curve defines the minimum average cost of producing alternative levels of output, allowing for optimal selection of
Topic: The Production Process and Costs Quiz ( MCQ and Answer )
Economies of scale exist whenever long-run average costs
When there are economies of scope between products, selling off an unprofitable subsidiary could lead to
When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can
Cost complementary exits in a multi-product cost function when
The difference between average total costs and average variable costs is
When marginal cost curve is below an average cost curve, average cost is
The marginal cost curve
Average fixed cost
Sunk costs are those costs that
If the price of labor increases, in order to minimize the costs of producing a given level of output, the firm manager should use
If the marginal product per dollar spent on capital is less than the marginal product per dollar spent on labor, then in order to minimize costs the firm should use
For given input prices, isocosts farther from the origin are associated with
An isocost line
Whenever an isoquant exhibits a diminishing marginal rate of technical substitution, the corresponding isoquants are
The marginal rate of technical substitution
The isoquants are normally drawn with a convex shape because inputs are
An isoquant defines the combination of inputs that yield the producer
The average product of labor depends on how many units of
The Cobb-Douglas production function is
With a linear production function there is a
The Leontief production function