Author Question: The point of tangency between the short-run average total cost (SRATC) curve and the long-run ... (Read 49 times)

fungirl · **on:** Oct 12, 2022

Question 1

The long-run average cost curve is an envelope curve, with each point associated with a short-run average cost curve
◦ tangent at that point.
◦ intersecting that point.
◦ at its minimum point.
◦ lying below it.
◦ crossing that point from above.

Question 2

The point of tangency between the short-run average total cost (SRATC) curve and the long-run average cost (LRAC) curve occurs
◦ only when the LRAC curve is at its minimum.
◦ at a point where both the average total cost and the marginal cost are rising.
◦ at a point where average total cost is falling but the marginal cost is rising.
◦ at the point of minimum SRATC.
◦ at an output level for which the quantity of the fixed factor is optimal.

iamkarenvv · **Reply #1 on:** Oct 12, 2022

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