Asked by Alyssa Wolski on May 09, 2024
Verified
The long-run average total cost curve shows the relationship between output and the average total cost when fixed cost has been chosen to minimize average total cost for each level of output.
Long-Run Average Total Cost Curve
A graphical representation illustrating the per unit cost of producing a good or service in the long run, when all inputs are variable.
Fixed Cost
Expenses that do not change with the level of output or sales in the short term, such as rent, salaries, and insurance.
Output
The total amount of goods or services produced by a company, industry, or economy over a certain period.
- Grasp the correlation between a business's level of production and its average total cost across the short run and long run periods.
Verified Answer
Learning Objectives
- Grasp the correlation between a business's level of production and its average total cost across the short run and long run periods.
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