A firm's long-run average cost curve shows the ________ average cost at which it is possible to produce each output when the firm has had ________ time to change both its labor force and its plant.
A) highest; sufficient
B) lowest; sufficient
C) lowest; insufficient
D) highest; insufficient
E) average; sufficient

Question

Quizplus · Accepted Answer

A firm's long-run average cost curve shows the lowest average cost at which it is possible to produce each output when the firm has had sufficient time to change both its labor force and its plant. This means that the firm has had enough time to adjust its inputs and technology to achieve the most efficient production process, resulting in the lowest average cost.

A Firm's Long-Run Average Cost Curve Shows the ________ Average