The long-run average total costs for a firm are equal to short-run average total costs when

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Quizplus · Accepted Answer

In the long run, all inputs are variable and a firm can choose the optimal combination of inputs to produce its output. As a result, the long-run average total cost curve is the envelope of the short-run average total cost curves. At the minimum point of the long-run average total cost curve, the firm is producing at the most efficient level possible given the technology and market conditions, meaning that the long-run average total costs are equal to the short-run average total costs. Therefore, choice B is the best option.

The Long-Run Average Total Costs for a Firm Are Equal