Author Question: The long-run average cost (LRAC) curve for a firm shows (Read 69 times)

booty5 · **on:** Oct 12, 2022

Question 1

Which of the following are likely to be sources of increasing productivity?
1. substitution toward labour and away from capital (with constant technology)
2. better-trained labour
3. increases in technological know-how
◦ 1 only
◦ 2 only
◦ 3 only
◦ 1 and 2 only
◦ 2 and 3 only

Question 2

The long-run average cost (LRAC) curve for a firm shows
◦ what happens to the fixed costs in the long run.
◦ the highest unit costs of producing a given output.
◦ the lowest unit cost at which the firm can produce a given output.
◦ the same cost and output levels as the short-run average cost curve.
◦ the operation of the law of diminishing returns.

xinyifff · **Reply #1 on:** Oct 12, 2022

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