-Based on the cost data in the above table, the long-run average cost (LRAC) is lowest when output is
A) 20.
B) 40.
C) 80.
D) Long-run average cost is constant at all levels of output.

Question

-Based on the cost data in the above table, the long-run average cost (LRAC) is lowest when output is
A) 20. 
B) 40. 
C) 80. 
D) Long-run average cost is constant at all levels of output.

Quizplus · Accepted Answer

The long-run average cost is lowest at the output level where the average cost per unit is minimized. Without the specific cost data, the typical pattern is that LRAC decreases with increasing output due to economies of scale, reaching a minimum point before potentially rising again.

-Based on the Cost Data in the Above Table, the Long-Run