Any point representing a cost and output combination that is below the long- run average cost curve
A) is attainable if the firm minimizes its costs according to the "principle of substitution".
B) is attainable only when all factors are variable.
C) represents unattainable cost levels.
D) may represent actual cost and production levels in the short run.
E) represents less efficient cost levels than points on the long- run average cost curve.

Question

Quizplus · Accepted Answer

Points below the long-run average cost curve represent unattainable cost levels because the curve shows the lowest possible cost at which a firm can produce any given level of output when all inputs are variable.

Any Point Representing a Cost and Output Combination That Is