In This Problem You Will Demonstrate Your Understanding of the Relationship

In this problem you will demonstrate your understanding of the relationship between short-run and long run average cost curves.
(a) Draw an example of a long-run average cost curve. Find the minimum point of the long run average cost curve and label that point "A" for reference. What is the slope of the LRATC curve to the left of point A? Why does it have this slope? What is the slope of the LRATC curve to the right of point A? Why does it have this slope?
(b) Choose a point to the left of point A on the LRATC curve, and label it point B for reference. Choose a point to the right of point A on the LRATC curve. Label it point C for reference. Draw the SRATC curve associated with point A and label it SRATCa. Is point A the minimum point of SRATCa? Why does SRATCa have the slope that it does at points to the left and right of point A?
(c) Draw SRATC curves associated with points B and C and label them SRATCb and SRATCc. Are points B and C minimum points for SRATCb and SRATCc? Explain.