At quantities less than the long-run least per-unit cost quantity of output, the long-run average cost curve is tangent to the _______ of the corresponding short-run average cost curve.
A) minimum
B) maximum
C) right of the minimum
D) left of the minimum

Question

Quizplus · Accepted Answer

At quantities less than the long-run least per-unit cost quantity of output, the long-run average cost curve is tangent to the left of the minimum of the corresponding short-run average cost curve. This is because the short-run average cost curve will be U-shaped, and the long-run average cost curve will have a flatter shape that intersects the U-curve on its left side. As production increases beyond the long-run least cost point, the long-run average cost curve will have a steeper slope than the short-run average cost curve.

At Quantities Less Than the Long-Run Least Per-Unit Cost Quantity