The long-run average total cost curve is:
A)steeper than the short-run average total cost curve as the firm incurs more fixed costs in the long run
B)never steeper than short-run average total cost curves, as the firm can always choose the same input combinations as the short-run
C)steeper or flatter than the short-run average cost curve, but it depends on the long-run marginal cost curve
D)we cannot say without more detailed information on the firm's costs

Question

Quizplus · Accepted Answer

The long-run average total cost curve is never steeper than short-run average total cost curves because, in the long run, a firm can adjust all inputs and choose the most efficient production scale for any output level, including those combinations available in the short run.

The Long-Run Average Total Cost Curve Is