A firm's expansion path
A)is the same thing as its long-run average cost curve.
B)is a curve that shows a firm's cost-minimising combination of inputs for every level of output, holding input prices constant.
C)shows the targeted growth rate in sales over the long run.
D)is a curve that shows expected profits at various price levels.

Question

Quizplus · Accepted Answer

A firm's expansion path is the curve that shows the firm's cost-minimising combination of inputs for every level of output, holding input prices constant. It is not the same as the long-run average cost curve (A), nor does it show targeted growth rate in sales (C) or expected profits (D).

A Firm's Expansion Path