Question

Which of the following statements is (are) TRUE?

A. Short-run average total cost curves intersect the long-run average total cost curve at its minimum point.
B. The long-run average total cost curve is derived by tracing out all of the firm's short-run average total cost curves.
C. The long-run average total cost curve indicates that it is more costly to produce output in the long run, especially when input prices are rising because of inflation.
D. It is not possible for two short-run average total cost curves to cross.

Answer 1

B. The long-run average total cost curve is derived by tracing out all of the firm's short-run average total cost curves.