Payments made by a firm to outsiders for hiring or purchasing their goods and services are known as:

Consider the following statements regarding the theories of cost in microeconomics: Statement 1: Traditional neoclassical cost theory derives smooth, U-shaped short-run average cost curves directly from the operation of the law of variable proportions. Statement 2: Modern cost theory argues that the long-run average cost (LAC) curve is U-shaped, indicating that diseconomies of scale are pervasive in manufacturing. Which of the statements given above is/are correct?

In the long-run theory of cost, the optimum scale of production is achieved where: