If a firm's long- run average cost is equal to $2.50 over a given range of output, this means that the firm's long- run marginal cost is greater than $2.50.

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Quizplus · Accepted Answer

The statement is false. If the firm's long-run average cost is equal to $2.50, it means that the long-run marginal cost is equal to $2.50 as well. When the marginal cost is equal to the average cost, the average cost is at its minimum point.

If a Firm's Long- Run Average Cost Is Equal to $2.50