{"id":54497,"date":"2024-04-16T00:11:10","date_gmt":"2024-04-16T00:11:10","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=54497"},"modified":"2024-04-16T00:11:10","modified_gmt":"2024-04-16T00:11:10","slug":"assertion-a-the-long-run-cost-curve-is-l-shaped-rather-than-u-shaped-reason-r-the-new-techniques-of-production-of-large-plants-reduce-the-total-costs-per-unit-of-output","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-the-long-run-cost-curve-is-l-shaped-rather-than-u-shaped-reason-r-the-new-techniques-of-production-of-large-plants-reduce-the-total-costs-per-unit-of-output\/","title":{"rendered":"Assertion (A): The long run cost curve is L-shaped rather than U-shaped. Reason (R): The new techniques of production of large plants reduce the total costs per unit of output."},"content":{"rendered":"

[amp_mcq option1=”Both A and R are true and R is the correct explanation of A” option2=”Both A and R are true, but R is not a correct explanation of A” option3=”A is true, but R is false” option4=”A is false, but R is true” correct=”option2″]<\/p>\n

The correct answer is: Both A and R are true, but R is not a correct explanation of A<\/strong>.<\/p>\n

The long run cost curve is L-shaped because, in the long run, all costs are variable. This means that firms can choose the size of their plants and the technology they use to produce their goods. As a result, firms can always produce at the lowest possible cost per unit of output.<\/p>\n

The new techniques of production of large plants do reduce the total costs per unit of output. However, this is not the reason why the long run cost curve is L-shaped. The long run cost curve is L-shaped because, in the long run, all costs are variable.<\/p>\n

Here is a more detailed explanation of each option:<\/p>\n