The Point of Tangency Between the Short- Run Average Total

question 31

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

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