The firm's long-run average total cost curve
A)intersects each short-run average total cost curve at its minimum point
B)lies below its short-run average total cost curves at every output level
C)lies above its short-run average total cost curves at every output level
D)coincides with a small segment of its short-run average total cost
E)touches each of the firm's short-run average total cost curves at the lowest points

Question

Quizplus · Accepted Answer

The long-run average total cost curve is an envelope curve that touches each short-run average total cost curve at their lowest points, representing the most efficient scale of production for each level of output.

The Firm's Long-Run Average Total Cost Curve