Biology Forums - Study Force

Question 1.

The long run is defined as a time period during which full adjustment can be made to any change in the economic environment. Thus in the long run, all factors of production are variable. Long-run curves are sometimes called planning curves, and the long run is sometimes called the

• minimum efficient time period.

• non-adjustment period.

• foreseeable future.

• planning horizon.

Question 2.

Which of the following statements with respect to the figure below is INCORRECT?




• If the anticipated permanent rate of output per unit time period is Q1 in panel (a), the optimal plant would correspond to SAC1.

• The long-run average cost curve LAC in panel (b) is sometimes called the planning curve representing the locus (path) of points.

• If the permanent rate of output increases to Q2 in panel (a), it will be more profitable to have a plant size corresponding to SAC3.

• All the possible short-run average cost curves that correspond to the different plant sizes are shown as SAC1 - SAC8.

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