True or false: Since the long-run cost is the lowest-cost way of producing each output, the...

True or false: Since the long-run cost is the lowest-cost way of producing each output, the long-run cost curve runs through the minimum points of the short-run cost curves. Briefly explain your answer

Expert Solution

Answer) True

It is true thatSince the long-run cost is the lowest-cost way of producing each output, the long-run cost curve runs through the minimum points of the short-run cost curves.

The long-run average cost (LRAC) curve shows the lowest cost for producing each quantity of output when fixed costs can vary, and so it is formed by the bottom edge of the family of SRAC curves. If a firm wished to produce quantity Q3, it would choose the fixed costs associated with SRAC3.

Rahul Sunny answered 2 years ago

Question 4 Is the following statement true, false, or ambiguous? Justify your answer. “Since long-run average...

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True/false. In the long-run, if price is above average fixed cost but below average total cost...

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) For each of the following events, explain the short-run and long-run effects on output and...

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1. For each of the following events, explain the short-run and long-run effects on output and...

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True or false: In the long run, a fixed tax per firm will have no effect...

True or false: In the long run, a fixed tax per firm will have no effect on the profit maximizing rate of output. Briefly explain your answer

A monopolist can earn above normal profit in the long run. true or false

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