The long-run average cost curve is the ______ of all of the firm's _____.
A) lower envelope; isocost lines
B) level curve; short-run average cost curves
C) sum; marginal cost curves
D) lower envelope; short-run average cost curves

Question

Quizplus · Accepted Answer

The long-run average cost curve is the lower envelope of all of the firm's short-run average cost curves, as it shows the lowest possible cost of producing each level of output in the long run by choosing the most efficient combination of inputs.

The Long-Run Average Cost Curve Is the ______ of All