The long-run average cost curve is, in principle, tangent to an infinite number of short-run average cost curves.

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Quizplus · Accepted Answer

This is because the long-run average cost curve represents the lowest possible average cost of producing a certain level of output given all possible combinations of inputs, while each short-run average cost curve represents the lowest possible average cost of producing a certain level of output given a fixed set of inputs. Therefore, the long-run average cost curve will touch or be tangent to each short-run average cost curve at the point where the firm optimally chooses the combination of inputs to minimize its cost of production.

The Long-Run Average Cost Curve Is, in Principle, Tangent to an Infinite