In reference to setting the production level, a firm's cost curves:
A)dictate what decisions the firm will make
B)have no bearing on what decisions the firm will make
C)by themselves do not tell us what decisions the firm will make
D)none of the above are true

Question

Quizplus · Accepted Answer

Cost curves provide important information about a firm's costs at different levels of production, but they do not directly dictate what decisions the firm will make. Other factors such as market demand, competition, and market price will also play a role in the firm's production decisions. Therefore, while cost curves are useful for analyzing a firm's costs, by themselves they do not tell us what decisions the firm will make.

In Reference to Setting the Production Level, a Firm's Cost