Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true. The shapes of long-run cost curves follow directly from the assumption of a fixed factor of production, which implies diminishing returns.The optimal scale of plant is the scale of plant that maximizes average cost.In the long-run competitive equilibrium, each individual firm chooses a scale of operations that minimizes its long-run average cost.

The diminishing returns occur in the short run. All factors of production is not variable in the…

Answered: Modified True or False: State whether…

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 19PAE

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Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true.

1. The shapes of long-run cost curves follow directly from the assumption of a fixed factor of production, which implies diminishing returns.
2. The optimal scale of plant is the scale of plant that maximizes average cost.
3. In the long-run competitive equilibrium, each individual firm chooses a scale of operations that minimizes its long-run average cost.

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