Which of the following statements is true for a given level of output?
A) Long-run average cost will always be greater than or equal to short-run average cost.
B) Long-run average cost and short-run average cost will be equal because the firm will use different input combinations in each period.
C) Long-run average cost will usually be greater than short-run average cost because more output is produced over the long run.
D) Long-run average cost will always be less than or equal to short-run average cost.

Question

Quizplus · Accepted Answer

In the long run, all factors of production are variable, allowing firms to adjust their production processes and input combinations to achieve the most cost-efficient method of producing a given level of output. This flexibility often results in a lower average cost than in the short run, where at least one factor of production is fixed.

Which of the Following Statements Is True for a Given