Exhibit 7-15 Long-run average cost

In Exhibit 7-15, short-run average total cost, short-run marginal cost, and long-run average cost are all equal at which level of output per week?

Question

Exhibit 7-15 Long-run average cost

In Exhibit 7-15, short-run average total cost, short-run marginal cost, and long-run average cost are all equal at which level of output per week?

Quizplus · Accepted Answer

At 1,000 units of output per week, the short-run average total cost, short-run marginal cost, and long-run average cost curves all intersect. This is the minimum point on the long-run average cost curve and therefore represents the most efficient level of output in the long run.

Exhibit 7-15 Long-Run Average Cost