A firm's long-run average cost curve shows the ________ average cost at which it is possible to produce each output when the firm has had ________ time to change both its labour force and its plant.
A) lowest; sufficient
B) lowest; insufficient
C) highest; sufficient
D) average; sufficient
E) highest; insufficient

Question

Quizplus · Accepted Answer

The long-run average cost curve represents the lowest average cost that a firm can achieve when it has had sufficient time to adjust its plant size and labor force to the desired output level. Therefore, the correct answer is (A) lowest and sufficient.

A Firm's Long-Run Average Cost Curve Shows the ________ Average