The figure below shows short-run average total cost curves for a firm under four different production technologies. Assume that there are only four different technologies that the firm could use.

-Refer to the figure above.The long-run average total cost curve of the firm goes through points ________.

Question

The figure below shows short-run average total cost curves for a firm under four different production technologies. Assume that there are only four different technologies that the firm could use.
 
-Refer to the figure above.The long-run average total cost curve of the firm goes through points ________.

Quizplus · Accepted Answer

In the long-run, the firm can choose any of the four technologies available. Therefore, the long-run average total cost curve is the lowest possible cost curve that passes through the minimum points of the short-run average total cost curves. In the given figure, these minimum points are at A, D, F, and G. Therefore, the long-run average total cost curve passes through these points, which are represented by choice C.

The Figure Below Shows Short-Run Average Total Cost Curves for a Firm