Any shift in the short- run average total cost curve will shift the long- run average cost curve.

Question

Quizplus · Accepted Answer

This is true because the short-run average total cost curve reflects the costs of production with fixed inputs. Any shift in the short-run average total cost curve indicates a change in the costs of variable inputs. Over time, a firm can adjust all of its inputs in the long run, and the long-run average cost curve reflects all of those cost adjustments. Therefore, any changes in the short-run costs will also affect the long-run costs.

Any Shift in the Short- Run Average Total Cost Curve