Asked by Ambrianna Jones on May 05, 2024
Verified
The long-run average cost curve is tangent to a series of short-run average fixed cost curves.
Long-Run Average Cost Curve
A graphical representation showing the minimum average cost at which any output level can be produced when all inputs are variable in the long run.
Short-Run
A timeframe in economics where at least one input, such as capital or labor, is fixed, limiting the ability of businesses to adjust production immediately.
Tangent
In economics, it represents a point where two curves touch, often used in optimization problems to find equilibrium points.
- Understand the role of scale economies in long-run cost behavior.
Verified Answer
ZK
Zybrea KnightMay 06, 2024
Final Answer :
False
Explanation :
The long-run average cost curve is tangent to a series of short-run average total cost curves, not average fixed cost curves.
Learning Objectives
- Understand the role of scale economies in long-run cost behavior.