A short- run average total cost curve will touch the long- run average cost curve at a level of output only
A) when the quantity of the fixed factor being employed is at the optimal level for that level of output.
B) where the short- run cost curve is downward sloping.
C) by coincidence.
D) where the short- run cost curve is downward- sloping and the quantity of the fixed factor is optimal.
E) where the short- run cost curve is upward sloping.

Question

Quizplus · Accepted Answer

In the short run, the average total cost curve touches the long-run average cost curve when the fixed factors are optimally employed for that level of output, meaning the firm is operating at its most efficient scale for that output level.

A Short- Run Average Total Cost Curve Will Touch the Long-