Which of the following statements concerning long-run and short-run cost curves is correct?
A)A short-run average cost curve can fall below the long-run average cost curve.
B)The short-run average cost curve is tangent to the long-run average cost curve for all levels of output of the fixed factor.
C)The long-run average cost curve envelops a whole family of short-run marginal cost curves.
D)The minimum point of the long-run average cost curve will correspond to the minimum point on a single short-run average cost curve.
E)Both the long-run and short-run average cost curves show the lowest cost of producing any output when all factors are variable.

Question

Quizplus · Accepted Answer

In the long run, firms can adjust all inputs, and the long-run average cost curve is derived from the minimum points of short-run average cost curves. The minimum point of the long-run average cost curve corresponds to the minimum point on one of the short-run average cost curves.

Which of the Following Statements Concerning Long-Run and Short-Run Cost