Question

indows 7 DDA- BUSINESS18-Spring 19Gina doc Microsoft Word Eile Edit View Insert Format Iools Table Window Help 1 According to the envelope relationship, at all but one output level, the short run average total cost curve is parallel to the long run ATC is below the long run ATC is tangent to the long run ATC. is above the long run ATC 2. In the long run, when average cost per unit decreases as output increases, we say that there are economies of scale in production True False 3. According to the envelope relationship, at all but one output level, the short run average total cost curve is parallel to the long run ATC below the long run ATC. is tangent to the long run ATC is above the long run ATC. Page 1 Sec 1

Answer 1

1) d.Short run average total cost curve is above the long run ATC.

  According to the envelope relationships, during the planned output level, the short run total cost will be equal to the long run ATC and short run average total cost will be higher than the long run average total cost during all other output levels.

2) a. True statement.

Constant returns to scale.

3) d.is above the long run ATC.