At quantities greater than the long-run least per-unit cost quantity of output, the long-run average cost curve is tangent to the _______ of the corresponding short-run average cost curve.
A) minimum
B) maximum
C) right of the minimum
D) left of the minimum

Question

Quizplus · Accepted Answer

In the long run, the average cost curve is tangent to the short-run average cost curves to the right of their minimum points. This is because, in the long run, firms can adjust all inputs and achieve economies of scale up to a certain point, after which diseconomies of scale set in, causing the long-run average cost to increase.

At Quantities Greater Than the Long-Run Least Per-Unit Cost Quantity