A ﬁrm is productively eﬃcient in the long run if _____.
A) its marginal cost equals marginal revenue
B) its minimum average variable cost and minimum average total cost curves coincide
C) its minimum average ﬁxed cost and minimum average total cost curves coincide
D) it produces output at the level where average total cost is minimum

Question

Quizplus · Accepted Answer

A firm is considered productively efficient in the long run when it produces output at the lowest possible cost, which occurs at the level where average total cost is at its minimum. This means the firm is operating on the lowest point of its long-run average total cost curve.

A ﬁRm Is Productively Eﬃcient in the Long Run If