Which of the following statements most accurately makes the distinction between the long run and the very- long run with respect to the long- run average cost (LRAC)curve?
A)In the long run,the firm is moving along the existing LRAC curve,whereas in the very- long run,the LRAC curve is shifting down.
B)In the long run,the firm is moving along the existing LRAC curve,whereas in the very- long run,the LRAC curve is shifting up.
C)In the long run,the LRAC curve is shifting up,whereas in the very- long run the firm is moving along the existing LRAC curve.
D)In the long run,the LRAC curve is shifting down,whereas in the very- long run the firm is moving along the existing LRAC curve.
E)There is no distinction between the long run and the very- long run with respect to the LRAC curve.

Question

Quizplus · Accepted Answer

In the long run, firms adjust their production levels along the existing LRAC curve. In the very-long run, technological advancements and other factors can shift the entire LRAC curve downward, indicating lower costs at all production levels.

Which of the Following Statements Most Accurately Makes the Distinction