FIGURE 8-1
-Refer to Figure 8-1.For which of the four firms would the family of short-run average total cost curves lie below the LRAC?
A)Firm A
B)Firm B
C)Firm C
D)Firm D
E)none of the four firms

Question

FIGURE 8-1
-Refer to Figure 8-1.For which of the four firms would the family of short-run average total cost curves lie below the LRAC?
A)Firm A 
B)Firm B 
C)Firm C 
D)Firm D 
E)none of the four firms

Quizplus · Accepted Answer

In the long run, the LRAC curve is the envelope of all possible short-run average total cost curves. Therefore, no short-run average total cost curve can lie entirely below the LRAC curve.

FIGURE 8-1 -Refer to Figure 8-1.For Which of the Four Firms Would