The long-run average total cost curve shows the minimum cost per unit of producing each output level when any desired size of factory can be constructed.

Question

Quizplus · Accepted Answer

The long-run average total cost curve reflects the minimum cost at which any given output level can be produced when all inputs, including factory size, are variable, allowing firms to choose the most cost-efficient production scale for any output level.

The Long-Run Average Total Cost Curve Shows the Minimum Cost