The curve that illustrates the relationship between output and average total cost when the fixed cost has been chosen to minimize the average total cost for each level of output is the _____ curve.
A) short-run average total cost
B) long-run average total cost
C) marginal cost
D) total product

Question

Quizplus · Accepted Answer

The curve that illustrates the relationship between output and average total cost when fixed cost has been chosen to minimize the average total cost for each level of output is the long-run average total cost curve. This curve shows the lowest possible average total cost that can be achieved for each level of output in the long-run, after all inputs can be varied.

The Curve That Illustrates the Relationship Between Output and Average