1. A short-run average cost curve is tangent to the long-run average cost curve
ID: 1164040 • Letter: 1
Question
1. A short-run average cost curve is tangent to the long-run average cost curve at the quantity where:
a. long-run average cost is minimized
b. the fixed plant size would have been optimal
c. short-run average cost is minimized
d. short-run marginal cost is equal to average cost
e. short-run marginal cost is minimized
QUESTION 6
between B and C
between A and B
beyond point D
between C and D
between O and A
a.between B and C
b.between A and B
c.beyond point D
d.between C and D
e.between O and A
Explanation / Answer
1
A.
At the point of tangent between the SR average cost curve and LR average cost curve, yields a long run average cost that is at a minimum level. Output produced at this level, will have lowest LR average cost.
Diagram for the question 6 is not provided in the question.
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