The relationship between long-run and short-run average total costs is known as the:
A) efficiency relationship.
B) technical relationship.
C) economic relationship.
D) envelope relationship.

Question

Quizplus · Accepted Answer

The envelope relationship describes how the long-run average total cost curve is the "envelope" of the short-run average total cost curves, showing the lowest possible cost at each level of output when all inputs are variable.

The Relationship Between Long-Run and Short-Run Average Total Costs Is