Asked by Olivia Anne Samonte on May 17, 2024
Verified
A firm's long-run supply curve
A) runs up its marginal cost curve starting at the break-even point.
B) runs up its marginal cost curve starting at the shutdown point.
C) is identical to the firm's entire marginal cost curve.
D) runs up the firm's marginal cost curve from the shutdown point to the break-even point.
Long-run Supply Curve
A graphical representation of the quantities of goods and services that producers are willing to offer for sale at different prices in the long run, when all inputs can be varied.
Marginal Cost Curve
A graphical representation showing how the cost to produce one additional unit of a good changes as production volume changes.
Break-even Point
The point at which total costs and total revenues are equal, meaning a business or project is neither making a profit nor a loss.
- Ascertain the linkages and divergences between decision-making in the immediate term and the extended term for corporations.
Verified Answer
LF
Lenora FletcherMay 23, 2024
Final Answer :
A
Explanation :
A firm's long-run supply curve runs up its marginal cost curve starting at the break-even point, as this is the point where the firm begins to make profits and is willing to produce more output. It includes all points where the firm can produce at a profit, whereas the short-run supply curve only includes points where the firm is operating with its existing fixed inputs. The long-run supply curve is also flatter than the short-run supply curve, as the firm has more flexibility to adjust its inputs in the long run.
Learning Objectives
- Ascertain the linkages and divergences between decision-making in the immediate term and the extended term for corporations.