CA Foundation Exam > CA Foundation Questions > Which of the following statements concerning ...
Start Learning for Free
Which of the following statements concerning the long-run average cost curve is false?
- a)It represents the least-cost input combination for producing each level of output.
- b)It is derived from a series of short-run average cost curves.
- c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.
- d)As output increases, the amount of capital employed by the firm increases along the curve.
Correct answer is option 'C'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
Which of the following statements concerning the long-run average cost...
Ans.
Option
Most Upvoted Answer
Which of the following statements concerning the long-run average cost...
Explanation:
Long-run average cost (LRAC) curve is a graphical representation of the lowest possible average cost of producing each level of output when all inputs can be varied. It is an envelope curve of a series of short-run average cost curves (SAC) for different plant sizes. The LRAC curve shows the relationship between the average cost and the output level of a firm in the long run.
False Statement: Option C
Option C states that the short-run cost curve at the minimum point of the LRAC curve represents the least-cost plant size for all levels of output. This statement is false because the minimum point on the LRAC curve represents the optimal plant size for a particular output level, not for all levels of output.
Other Statements:
A) It represents the least-cost input combination for producing each level of output.
This statement is true. The LRAC curve shows the least-cost input combination for producing each level of output when all inputs are variable.
B) It is derived from a series of short-run average cost curves.
This statement is true. The LRAC curve is derived from a series of SAC curves for different plant sizes.
D) As output increases, the amount of capital employed by the firm increases along the curve.
This statement is true. As the output level increases, the firm needs to employ more capital to produce efficiently, and the LRAC curve shows the relationship between the average cost and the output level of a firm in the long run.
Conclusion:
The LRAC curve is an important tool for a firm to determine the optimal plant size and input combination for producing each level of output in the long run. The false statement in option C indicates that the LRAC curve represents the least-cost plant size for a particular output level, not for all levels of output.
Long-run average cost (LRAC) curve is a graphical representation of the lowest possible average cost of producing each level of output when all inputs can be varied. It is an envelope curve of a series of short-run average cost curves (SAC) for different plant sizes. The LRAC curve shows the relationship between the average cost and the output level of a firm in the long run.
False Statement: Option C
Option C states that the short-run cost curve at the minimum point of the LRAC curve represents the least-cost plant size for all levels of output. This statement is false because the minimum point on the LRAC curve represents the optimal plant size for a particular output level, not for all levels of output.
Other Statements:
A) It represents the least-cost input combination for producing each level of output.
This statement is true. The LRAC curve shows the least-cost input combination for producing each level of output when all inputs are variable.
B) It is derived from a series of short-run average cost curves.
This statement is true. The LRAC curve is derived from a series of SAC curves for different plant sizes.
D) As output increases, the amount of capital employed by the firm increases along the curve.
This statement is true. As the output level increases, the firm needs to employ more capital to produce efficiently, and the LRAC curve shows the relationship between the average cost and the output level of a firm in the long run.
Conclusion:
The LRAC curve is an important tool for a firm to determine the optimal plant size and input combination for producing each level of output in the long run. The false statement in option C indicates that the LRAC curve represents the least-cost plant size for a particular output level, not for all levels of output.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer?
Question Description
Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer?.
Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the least–cost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup