A firm's long- run average cost curve
A)is horizontal in most situations.
B)is the boundary between attainable and unattainable cost levels,with known production technologies and given factor prices.
C)shows the relationship between marginal cost and output given that the economically most efficient method of production is employed.
D)is an envelope of short- run average variable cost curves.
E)shows the minimum cost of producing each possible level of output with a fixed factor.

Question

Quizplus · Accepted Answer

The long-run average cost curve represents the lowest attainable cost level for any given level of output, taking into consideration all production technologies and factor prices. It is the boundary between attainable and unattainable cost levels in the long run.

A Firm's Long- Run Average Cost Curve