x-( D Long Run Average and , arn.aus.edu/webapps/assessment/take/launch,jsp?cour

Question

x-( D Long Run Average and , arn.aus.edu/webapps/assessment/take/launch,jsp?course assessment id- 19726 1&course; jd- 49313 18content id-1023421,18step null arnerYouTube G gmailDropbox G Google : Thesaurus-Recent rapid regione e studentinal R Stories from Real tie 40 MC 30 AC 20 10 0 1 2 3 4 5 6789 10 Output (goods per week) Figure 7.9 reveals that the relationship between LAC and LMC is that o when LAC is falling. LMC is rising when LMC is falling LAC is rising when LMC is at its minimum point LAC passes through it LMC

Explanation / Answer

Ans:

1)  LMC < LAC, WHEN LAC is falling, LMC = LAC when LAC is at its minimum point, When LMC > LAC, WHEN LAC is rising.

Long-run marginal cost is the change in total cost from producing an additional unit of output in the long-run.The LAC represents the lowest possible average cost for producing the output. When LAC is downward-sloping, LMC will lie below LAC. when LMC < LAC, LAC falls and when LMC > LAC, LAC rises.

4) Less elastic in market X than market Y.

Elasticity is  the degree of responsiveness in demand for the product in relation to changes in price. when demand is more elastic, then small changes in price will cause higher changes in quantity demanded.In this case a lower price in market Y means the demand is more elastic in market Y and less elastic in the market X.

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