Question

When the LRAC curve has a clear minimum point, then
a. any firm producing a different quantity will have higher costs
b. the industry is likely to have more firms competing
c. the industry is likely to have fewer firms competing
d. the industry must have a single firm supplying
e. all the output that buyers want to buy

Answer 1

Answer:

The correct answer is a. any firm producing a different quantity will have higher costs .

Explanation:

The LRAC curve determines the relationship between everything assumed by production in order to produce a certain quantity of goods. In this case, when a minimum point is presented, every producing entity will have an increase in costs, because this situation determines an inverse relationship between the two variables studied. in case the fund is flat, it is understood that the company is capable of competing in the market.

Answer 2

Answer:

The correct answer is option (a) any firm producing a different quantity will have higher costs .

Explanation:

LRAC curve means long-run average cost

The LRAC curve is a u-shape curve that shows the lowest cost of production per unit based on it's  output level with variable factors of production.

A firm uses the LRAC curve to determined the lowest cost of producing one unit of a particular goods. If the firm chooses to produce more quantity of goods, the cost will be higher.

The minimum point on the curve shows the lowest cost of production per unit.