In Figure 21.4, the long-run average total cost curve is given by the curved line segment
A)ACE.
B)ABFDGE.
C)ABF only.
D)BFD.

Question

In Figure 21.4, the long-run average total cost curve is given by the curved line segment
A)ACE. 
B)ABFDGE. 
C)ABF only. 
D)BFD.

Quizplus · Accepted Answer

The long-run average total cost curve is represented by the curved line ABFDGE. This is because in the long run, all inputs are variable and the firm can adjust its scale of production, thus impacting its costs. The curve shows the minimum average total cost that can be achieved at each level of output. Therefore, the correct choice is B which includes the entire curve ABFDGE.