Determine whether the following statements are TRUE or FALSE. Explain your answer using graphs or examples. a. If a firm has zero elasticity substitution between inputs, then the short-run cost of producing a level of output equals the long-run cost. b. For firms in a competitive market, producing a maximizing profit quantity always means minimizing cost, while the reverse is not true.
Determine whether the following statements are TRUE or FALSE. Explain your answer using graphs or examples. a. If a firm has zero elasticity substitution between inputs, then the short-run cost of producing a level of output equals the long-run cost. b. For firms in a competitive market, producing a maximizing profit quantity always means minimizing cost, while the reverse is not true.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Determine whether the following statements are TRUE or FALSE. Explain your answer using graphs or examples.
a. If a firm has zero elasticity substitution between inputs, then the short-run cost of producing a level of output equals the long-run cost.
b. For firms in a competitive market, producing a maximizing profit quantity always means minimizing cost, while the reverse is not true.
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