Where the long-run average total cost curve is at its lowest point,it is tangent to the _____ of the corresponding short-run average total cost curve.
A)minimum
B)maximum
C)right of the minimum
D)left of the minimum

Question

Quizplus · Accepted Answer

The long-run average total cost curve represents the lowest possible cost of producing each level of output given the available technology and inputs. Thus, at its lowest point, it is tangent to the minimum point of the corresponding short-run average total cost curve. This is because in the long run, firms can adjust their inputs and technologies, whereas in the short run, some inputs are fixed and cannot be adjusted. As a result, the short-run average total cost curve is always above the long-run average total cost curve, except at the minimum point, where they are tangent to each other.

Where the Long-Run Average Total Cost Curve Is at Its