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Questions and Answers
Where does AVC reach its minimum?
Where does AVC reach its minimum?
- At point O
- At point Q (correct)
- At point S
- At point P
What happens to SAC to the left of q2?
What happens to SAC to the left of q2?
- SAC is rising
- SAC is equal to SMC
- SAC is falling (correct)
- SAC is constant
Where does the SMC curve intersect the SAC curve in Figure 3.8?
Where does the SMC curve intersect the SAC curve in Figure 3.8?
- Point Q
- Point O
- Point S (correct)
- Point P
In the long run, what happens to fixed costs?
In the long run, what happens to fixed costs?
What does LRAC represent?
What does LRAC represent?
When is AVC greater than SMC?
When is AVC greater than SMC?
What is the relationship between SAC and AVC initially as output increases?
What is the relationship between SAC and AVC initially as output increases?
At what point does the rise in AVC become larger than the fall in AFC according to the text?
At what point does the rise in AVC become larger than the fall in AFC according to the text?
Where does the minimum point of SAC curve lie compared to the minimum point of AVC curve?
Where does the minimum point of SAC curve lie compared to the minimum point of AVC curve?
When does SMC become greater than SAC according to the text?
When does SMC become greater than SAC according to the text?
What is the shape of the SAC curve described in the text?
What is the shape of the SAC curve described in the text?
What does the SMC curve do to the SAC curve at the minimum point of SAC?
What does the SMC curve do to the SAC curve at the minimum point of SAC?
What is the formula for Average Fixed Cost (AFC)?
What is the formula for Average Fixed Cost (AFC)?
At what level of output is the Short Run Average Cost (SAC) equal to the Average Variable Cost (AVC)?
At what level of output is the Short Run Average Cost (SAC) equal to the Average Variable Cost (AVC)?
What does the Short Run Marginal Cost (SMC) represent?
What does the Short Run Marginal Cost (SMC) represent?
How is Total Variable Cost (TVC) calculated?
How is Total Variable Cost (TVC) calculated?
Which cost curve represents the sum of Total Fixed Cost (TFC) and Total Variable Cost (TVC)?
Which cost curve represents the sum of Total Fixed Cost (TFC) and Total Variable Cost (TVC)?
What does Marginal Cost represent in the short run?
What does Marginal Cost represent in the short run?
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