Answer the following questions true (T) or false (F)
1. The long run average cost curve is also known as the planning curve.
2. The long run equilibrium of the firm under conditions of perfect competition will occur at that output level where the product price is equal to both the firm's marginal and average total costs.
3. An isoquant reflects the combination of products that minimizes the cost of production.
1. TRUE
2. TRUE
3. FALSE
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A change in the ceteris paribus conditions for supply will lead to a
A) change in quantity supplied. B) change in supply. C) change in quantity supplied and a change in supply. D) change in how consumers view the quality of the good.
Prostitution is legal in Churchill County, Nevada, but a referendum threatened to close two brothels (prostitution businesses) in that county. What idea from Chapter 1 of the text does this story best illustrate?
A. Sunk costs do not matter in making decisions. B. Microeconomics and macroeconomics are very much interrelated. C. Social and political forces sometimes rein in market forces. D. Marginal revenue should equal marginal cost