The Point of Tangency Between the Short-Run Average Total Cost

question 22

Multiple Choice

The point of tangency between the short-run average total cost (SRATC) curve and the long-run average cost (LRAC) curve occurs

• A)at the point of minimum SRATC.
• B)at a point where average total cost is falling but the marginal cost is rising.
• C)at a point where both the average total cost and the marginal cost are rising.
• D)at an output level for which the quantity of the fixed factor is optimal.
• E)only when the LRAC curve is at its minimum.

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Definitions:

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