[amp_mcq option1=”its TC and TR curve coincide” option2=”AC is at its minimum” option3=”AC = TFC” option4=”it is faced with a horizontal demand curve” correct=”option1″]<\/p>\n
The correct answer is: A firm may be considered to be of optimum size when its AC is at its minimum.<\/p>\n
A firm’s optimum size is the level of output at which its average cost is at its minimum. This is because at this level of output, the firm is producing at the most efficient level and is not incurring any unnecessary costs.<\/p>\n
Option B is incorrect because AC is at its minimum when the firm is producing at its optimum size. However, AC can also be at its minimum when the firm is producing at a lower level of output. This is because the firm may be experiencing economies of scale at this lower level of output.<\/p>\n
Option C is incorrect because AC = TFC when the firm is producing at zero output. This is because the firm’s total fixed costs are incurred regardless of the level of output.<\/p>\n
Option D is incorrect because a firm’s demand curve is not always horizontal. A firm’s demand curve can be downward-sloping, which means that the firm faces a downward-sloping demand curve. This means that the firm can sell more units of output by lowering its price.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”its TC and TR curve coincide” option2=”AC is at its minimum” option3=”AC = TFC” option4=”it is faced with a horizontal demand curve” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-50875","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n