Question

Which of the following statements concerning the long - run average cost​ (LRAC) curve is correct​?A.The LRAC curve is derived from a series of short-run marginal cost curves.B.The LRAC curve represents the least-cost input combination of inputs for producing each level of output.C.As output​ increases, the amount of capital employed by the firm is held constant along the LRAC curve.D.The short-run cost curve at the minimum point of the LRAC curve represents the least-cost plant size for all levels of output.

Answer 1

Answer:

The correct answer is letter "B": The LRAC curve represents the least-cost input combination of inputs for producing each level of output.

Explanation:

Presuming that all factors for production are available, the long-run average cost (LRAC) curve portraits the lowest cost per unit of the company at each output level. The approach also presumes that the company has selected the production optimal factor mix.