3. The following graph shows a department store's long-run average cost (LRAC) curve. The output per period is measured as total sales (for example M and N). The manager is considering a new business plan. Given the LRAC curve, which statement is NOT correct Long-run average cost M Output per period A. The store should close some business when sales reach N. B. The store should increase sales in the interval (0, M). C. The store D. The store should expand business when sales reach N. indifferent between expanding sales or not in (M, N). ? rrect Cost per unit

3. The following graph shows a department store's long-run average cost (LRAC) curve. The output per period is measured as total sales (for example M and N). The manager is considering a new business plan. Given the LRAC curve, which statement is NOT correct Long-run average cost M Output per period A. The store should close some business when sales reach N. B. The store should increase sales in the interval (0, M). C. The store D. The store should expand business when sales reach N. indifferent between expanding sales or not in (M, N). ? rrect Cost per unit

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 33CTQ: Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then...

See similar textbooks

Similar questions

What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
How does fixed cost affect marginal cost? Why is this relationship important?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
What is a long-run average cost curve?
Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?
Compute the average total cost, average variable cost, and marginal cost of producing 50 and 72 haircuts. Draw the graph of line three curves between 60 and 72 haircuts.