Because of the greater flexibility that firms have in the long run, all short-run cost curves lie on or above the long-run curve.

Question

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In the long run, firms can adjust all inputs and adopt new technologies, allowing them to achieve lower costs for any level of output compared to the short run, where some inputs are fixed. This flexibility means the long-run cost curve serves as a lower boundary for short-run cost curves.

Because of the Greater Flexibility That Firms Have in the Long