Which of the following is true about the long-run average cost curve?

Which of the following is true about the long run average cost curve?

  • The long run average cost curve is comprised of all the lowest points of each of the short run average cost curves because no firm will operate at a level of higher per-unit costs in the long run than in the short run.
  • The long run average cost curve can be found as the MC from above the shut down point onward.
  • The long run average cost curve is shaped like a bell and rises because of economies of scale while falling because of diseconomies.
  • The long run average cost curve cannot be equal to or lie below any short run average cost curve because in the short run all factors of production can be variable.

Answer

Ans. The long run average cost curve is comprised of all the lowest points of each of the short run average cost curves because no firm will operate at a level of higher per-unit costs in the long run than in the short run. Answer. Costpan. ATCY unit ATC, ATC2 ATCI long average cost CLRAC) Output

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