According to the Modern theory of cost, which of the following cost curves coincide with each other and…
In the modern theory of cost, plants are built with reserve capacity so that over a wide range of output, the Short-run Average Variable Cost (SAVC) curve and the Short-run…
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According to the Modern theory of cost, which of the following cost curves coincide with each other and are a horizontal straight line over a wide range of output ?
Answer and explanation
Correct answer C
In the modern theory of cost, plants are built with reserve capacity so that over a wide range of output, the Short-run Average Variable Cost (SAVC) curve and the Short-run Marginal Cost (SMC) curve coincide and form a horizontal straight line.
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RPSC Assistant Professor (College Education)