A Firm's Long-Run Average Cost Curve

question 57

Multiple Choice

A firm's long-run average cost curve

• A)shows the minimum cost of producing each possible level of output with a fixed factor.
• B)shows the relationship between marginal cost and output given that the economically most efficient method of production is employed.
• C)is the boundary between attainable and unattainable cost levels,with known production technologies and given factor prices.
• D)is horizontal in most situations.
• E)is an envelope of short-run average variable cost curves.

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Definitions:

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