Which of the following statements is true for a given level of output?
A) Long-run average cost will always be greater than or equal to short-run average cost
B) Long-run average cost and short-run average cost will be equal because the firm will use different input combinations in each period
C) Long-run cost will usually be greater than short-run cost
D) Long-run average cost will always be less than or equal to short-run average cost

Question

Quizplus · Accepted Answer

In the long run, all inputs are variable, allowing firms to adjust all factors of production and potentially achieve lower costs through economies of scale or more efficient input combinations. Therefore, long-run average cost will always be less than or equal to short-run average cost, where at least one input is fixed.

Which of the Following Statements Is True for a Given