Long-run marginal cost is equal to short-run marginal cost at the level of output where the corresponding short-run average total cost curve is tangent to the long-run average cost curve.

Question

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At the level of output where the short-run average total cost curve is tangent to the long-run average cost curve, the plant size and input mix are optimized for that output level, making the short-run marginal cost equal to the long-run marginal cost.

Long-Run Marginal Cost Is Equal to Short-Run Marginal Cost at the Level