Given the technology, SRAC is _______________ SRMC at that level of output where SRAC is minimized.
A) greater than
B) less than
C) equal to

Question

Quizplus · Accepted Answer

At the level of output where SRAC is minimized, the firm is producing at the most efficient scale possible given its current technology. Therefore, at this level of output, SRAC is equal to SRMC, as any additional unit of output produced will be produced at the minimum average cost and at the same marginal cost as the last unit produced.

Given the Technology, SRAC Is _______________ SRMC at That Level