We can construct a LRAC curve from a succession of SRAC curves. We call this LRAC curve:
A) the exponential curve
B) the envelope curve
C) the expansion curve
D) the encompass curve

Question

Quizplus · Accepted Answer

The LRAC (Long-Run Average Cost) curve is called the envelope curve because it is formed by the lower boundary of a series of SRAC (Short-Run Average Cost) curves, representing the lowest possible cost at each level of output when all inputs are variable.

We Can Construct a LRAC Curve from a Succession of SRAC