31.The long-run average cost curve A) Is a planning curve B) Identifies the cost

Question

31.The long-run average cost curve A) Is a planning curve B) Identifies the cost-minimizing plant size and quantity of labour C) Is the relation between lowest attainable 'ATC and output when D) Consists of the segments of different short-run ATC' curves E) Is all of the above. for each output level. both plant size and labour are variable. along which average total cost is lowest. 32.Constant returns to seale means that as all inputs are increased A) Total output remains constant. B) Average total cost remains constant. C) Average total cost increases at the same rate as inputs. D) Long-run average cost remains constant. E) Long-run average cost rises at the same rate as inputs. 33.The short run is defined as a period A) Of less than a month. B) During which there is insufficient time to change the employment level of any factor. C) During which at least one factor of production is fixed and others D) During which new firms can enter an industry and old firms can E) During which there is insufficient time to change output. are variable. exit.

Explanation / Answer

Question 31). Answer :- Option E). Is all of the above.

Question 32). Answer :- Option B). Average total cost remains constant.

Question 33). Answer :- Option C). During which at least one factor of production is fixed and others are variable.

Question 34). Answer :- Option D). Economic profits are zero.

Explanation :- Economic profits = Total revenue - Total explicit costs - Total implicit costs.

= 100000 - 75000 - 25000

= 0.

Conclusion :- Economic profits are zero. (Option D).

Question 35). Answer :- Option A). Is always less than average product.

Question 36). Answer :- Option E). All of the above, since fixed costs are constant.

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