A long-run total cost curve:
A)always has a constant slope.
B)is always upward sloping.
C)never has a constant slope.
D)is always downward sloping.

Question

Quizplus · Accepted Answer

The long-run total cost curve is always upward sloping because as output increases, more and more variable inputs are required to produce additional units, eventually leading to the need for additional fixed inputs. This results in higher total costs. The slope of the curve can change at different levels of output due to economies or diseconomies of scale, but it is never constant. A long-run total cost curve is upward sloping because as output increases, all input costs must increase as well, such as labor and capital. The firm must adjust to produce more goods, which requires more input resources. Thus, the cost of production will increase as output increases over the long run.

A Long-Run Total Cost Curve