Along its long-run total cost curve,a firm is producing
A)at the output level for each plant size that has the lowest cost
B)at the minimum points of its various total cost curves
C)each level of output using the input mix that has the lowest cost
D)each level of output using the fewest possible inputs
E)at the output level for each plant size that uses the fewest possible inputs

Question

Quizplus · Accepted Answer

Along the long-run total cost curve, the firm is producing each level of output using the input mix that has the lowest cost. This means that the firm is efficiently utilizing its resources to minimize its costs at every level of production. The other choices are not accurate – A only applies to the short-run, B does not account for economies of scale, D is not necessarily efficient, and E ignores the potential for economies of scale.

Along Its Long-Run Total Cost Curve,a Firm Is Producing