Price Elasticity of Demand
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Questions and Answers

Which factors of production are adjustable in the long run?

  • Only variable factors
  • Only fixed factors
  • Both fixed and variable factors (correct)
  • Neither fixed nor variable factors

    • What do long-run costs represent?

  • Costs incurred when only fixed inputs are adjusted
  • Costs incurred when all inputs are adjusted to reach a desired level of output (correct)
  • Costs incurred when only variable inputs are adjusted
  • Costs incurred when no inputs are adjusted

    • What do long-run average costs (LRAC) indicate?

  • The highest cost per unit of output achievable
  • The average cost per unit of output achievable when all inputs can be adjusted
  • The average cost per unit of output achievable when all inputs are fixed
  • The lowest cost per unit of output achievable when all inputs can be adjusted (correct)

    • What are economies of scale?

    <p>When the average cost of producing a good or service decreases as the quantity produced increases</p> Signup and view all the answers

    How can technological advancements affect production costs?

    <p>They decrease production costs</p> Signup and view all the answers

    How can market competition impact production costs?

    <p>It decreases production costs</p> Signup and view all the answers

    What do economies of scale result in?

    <p>Lower production costs</p> Signup and view all the answers

    What do technological advancements lead to in terms of production costs?

    <p>Lower production costs</p> Signup and view all the answers

    What is the relationship between market competition and production costs?

    <p>Market competition decreases production costs</p> Signup and view all the answers

    What do long-run average costs (LRAC) indicate about production levels?

    <p>The lowest cost per unit of production achievable when all inputs can be adjusted</p> Signup and view all the answers

    Which of the following is true about long-run costs?

    <p>Long-run costs are incurred when all inputs are adjusted to reach a desired level of output.</p> Signup and view all the answers

    What do long-run average costs (LRAC) indicate?

    <p>The lowest cost per unit of output achievable when all inputs can be adjusted.</p> Signup and view all the answers

    What is the relationship between production and costs in the long run?

    <p>Long-run costs are incurred when all inputs are adjusted to reach a desired level of output.</p> Signup and view all the answers

    What can economies of scale result in?

    <p>Decreased average cost of producing a good or service as the quantity produced increases.</p> Signup and view all the answers

    How can technological advancements affect production costs?

    <p>Technological advancements can lead to lower production costs by increasing productivity or reducing the need for labor.</p> Signup and view all the answers

    What impact can market competition have on production costs?

    <p>Market competition can drive down production costs by forcing firms to be more efficient and innovative.</p> Signup and view all the answers

    What do economies of scale occur as?

    <p>The average cost of producing a good or service decreases as the quantity produced increases.</p> Signup and view all the answers

    What do technological advancements lead to in terms of production costs?

    <p>Technological advancements can lead to lower production costs by increasing productivity or reducing the need for labor.</p> Signup and view all the answers

    What is the impact of market competition on production costs?

    <p>Market competition can drive down production costs by forcing firms to be more efficient and innovative.</p> Signup and view all the answers

    What do long-run average costs (LRAC) indicate about production levels?

    <p>The efficiency of any given production level within the long-run production possibilities curve.</p> Signup and view all the answers

    Which of the following is true about long-run costs?

    <p>Long-run costs are incurred when all inputs are adjusted to reach a desired level of output.</p> Signup and view all the answers

    What do long-run average costs (LRAC) indicate about production levels?

    <p>The efficiency of any given production level within the long-run production possibilities curve.</p> Signup and view all the answers

    What impact can market competition have on production costs?

    <p>Market competition can drive down production costs by forcing firms to be more efficient and innovative.</p> Signup and view all the answers

    What do economies of scale occur as?

    <p>The average cost of producing a good or service decreases as the quantity produced increases.</p> Signup and view all the answers

    What do technological advancements lead to in terms of production costs?

    <p>Technological advancements can lead to lower production costs by increasing productivity or reducing the need for labor.</p> Signup and view all the answers

    What can economies of scale result in?

    <p>Lower production costs and increased efficiency.</p> Signup and view all the answers

    Which factors of production are adjustable in the long run?

    <p>All factors of production.</p> Signup and view all the answers

    What is the relationship between production and costs in the long run?

    <p>Long-run costs are incurred when all inputs are adjusted to reach a desired level of output.</p> Signup and view all the answers

    What do long-run average costs (LRAC) indicate?

    <p>The lowest cost per unit of output achievable when all inputs can be adjusted.</p> Signup and view all the answers

    What is the impact of market competition on production costs?

    <p>Market competition can drive down production costs by forcing firms to be more efficient and innovative.</p> Signup and view all the answers

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