The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5

-The long-run average total cost curve represents:
A)the maximum cost of producing any level of output when all the factors are fixed.
B)the lowest cost of producing any level of output when all the factors are variable.
C)the maximum cost of producing any level of output when all the factors are variable.
D)the lowest cost of producing any level of output when all the factors are fixed.
E)the lowest cost of producing any level of output when at least one factor is fixed.

Question

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5
 
-The long-run average total cost curve represents:
A)the maximum cost of producing any level of output when all the factors are fixed. 
B)the lowest cost of producing any level of output when all the factors are variable. 
C)the maximum cost of producing any level of output when all the factors are variable. 
D)the lowest cost of producing any level of output when all the factors are fixed. 
E)the lowest cost of producing any level of output when at least one factor is fixed.

Quizplus · Accepted Answer

The long-run average total cost curve represents the lowest cost of producing any level of output when all the factors are variable. In the long run, all factors of production are variable, so the firm can choose the most cost-efficient combination of inputs for any given output level, resulting in the lowest average total cost.

The Table Given Below Shows the Average Total Cost of Production