The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3

-The long-run average-total-cost curve connects the lowest cost for each level of output given by the short-run average-total-cost curves.

Question

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3
 
-The long-run average-total-cost curve connects the lowest cost for each level of output given by the short-run average-total-cost curves.

Quizplus · Accepted Answer

This is true, as the LRATC curve is essentially the envelope of all the different SRATC curves, connecting the lowest cost points for each level of output.

The Figure Given Below Shows Three Short Run Average Total