Graph 5-5 -In Graph 5-5, which supply curve is most likely the long-run supply curve? A)S1 B)S₂ C)S3 D)all of the above are equally likely to be the long-run supply curve

Question

Quizplus · Accepted Answer

The long-run supply curve represents the minimum point of the average cost curve, which is where the firm produces at maximum efficiency. In Graph 5-5, S3 is the only curve that intersects the lowest point of the average cost curve. Therefore, it is the most likely to be the long-run supply curve. S1 and S₂ intersect the average cost curve at higher points, which suggests that they represent less efficient production methods.