Explain why the long-run total cost curve, not the short-run total cost curve, shows the lowest cost of producing any level of output. Is there an exception?
What will be an ideal response?
In the long run, all costs are variable so the firm can select the least-cost mix of all inputs to produce any given quantity. The exception would be at minimum long-run cost where min. LR and min. SR costs are equal.
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The four phases of the business cycle are
A. expansion, peak, recession, trough B. prosperity, recession, depression, recovery C. inflation, recession, stagflation, expansion D. consumption, investment, government purchases, and net exports
During the 1990s,
a. tax revenues have decreased b. budget deficits decreased substantially c. sustained economic growth has increased both deficits and tax revenues d. government spending has increased dramatically due to increased defense expenditures e. the view in government, academe, and society that government can contribute to moderate social and economic ills has been persuasive