The long-run average cost curve (LRAC)helps the producer understand which of the following?
A) It shows how large a business should be, to be most efficient.
B) It shows how competitors arrive at their prices.
C) It demonstrates the influence of external factors.
D) It shows how pricing should be customer-driven.
E) It demonstrates how break-even analysis should work.

Question

The long-run average cost curve (LRAC)helps the producer understand which of the following?
A)	It shows how large a business should be, to be most efficient.
B)	It shows how competitors arrive at their prices.
C)	It demonstrates the influence of external factors.
D)	It shows how pricing should be customer-driven.
E)	It demonstrates how break-even analysis should work.

Quizplus · Accepted Answer

The long-run average cost curve (LRAC) is a visual representation of the lowest average cost at which a firm can produce any given level of output in the long run, when all inputs are variable. This helps a producer understand the most efficient scale of operation or how large the business should be to minimize costs and maximize efficiency.

The Long-Run Average Cost Curve (LRAC)helps the Producer Understand Which