The curve that illustrates the relationship between output and average total cost when the fixed cost has been chosen to minimize average total cost for each level of output is the:
A)short-run average total cost curve.
B)long-run average total cost curve.
C)marginal cost curve.
D)total product curve.

Question

Quizplus · Accepted Answer

The curve that illustrates the relationship between output and average total cost when the fixed cost has been chosen to minimize average total cost for each level of output is the long-run average total cost curve. This curve shows the lowest possible cost of producing a particular quantity of output, given the technology and resource prices available to the firm in the long run.

The Curve That Illustrates the Relationship Between Output and Average