The short-run average cost curve shows the lowest possible average cost corresponding to each output level, assuming that all inputs are variable.

Name: The short-run average cost curve shows the lowest possible average cost corresponding to each output level, assuming that all inputs are variable.
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The short-run average cost curve shows the lowest possible average cost corresponding to each output level, assuming that at least one input is fixed, not variable.

The Short-Run Average Cost Curve Shows the Lowest Possible Average