Question

True, False or Uncertain: "Long-run cost is always lower than that of short-run cost". Explain.

True, False or Uncertain: "Long-run cost is always lower than that of short-run cost". Explain.

Homework Answers

Answer #1

True, Long run cost will always be lower than short run cost.

In the long run all costs becomes variable while in the short run costs are variable and fixed in nature and based on that in the short run there are various cost curves at different level of output while in the long run firm decides its output based on lowest level of cost at various levels of short run production curves, therefore long run graph will be the curve passing from all points of lowest level of production in short run. Hence, this long run cost curve is always lies below short run cost curves.

SRAC = Short run aggregate cost

LRAC = Long run aggregate cost

Please Upvote and Support!!

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The short-run total cost of producing some level of output can never be lower than long-run...
The short-run total cost of producing some level of output can never be lower than long-run total cost. a. True b. False
True, false or uncertain? "A permanent decrease in the cost of producing gasoline will lead to...
True, false or uncertain? "A permanent decrease in the cost of producing gasoline will lead to a greater increase in gasoline sales in the long run than in the short run, but could increase car sales more in the short run than in the long run."
True or False, Explain As long as the marginal cost of production is lower than the...
True or False, Explain As long as the marginal cost of production is lower than the average variable cost, then a firm demonstrate increasing return to scale.
9. State whether the following is True, False or Uncertain. Explain. In the long run, firms...
9. State whether the following is True, False or Uncertain. Explain. In the long run, firms will exit an industry in which they are incurring losses.
which statement about the long-run and short-run total cost curve is true A none of the...
which statement about the long-run and short-run total cost curve is true A none of the answers B the short-run total cost is greater than or equal to the long-run total cost C for a given level of output it is possible that the short-run cost is less than the long-run cost D the short-run total cost is always greater than the long-run total cost
Question 1: True/False/uncertain For each statement, state whether you think it is True, False or Uncertain...
Question 1: True/False/uncertain For each statement, state whether you think it is True, False or Uncertain and give a short explanation for your answer. a) Malthus predicted that the population of an economy should be stable in the long run. b) Poor countries have not experienced a demographic transition. c) Improvement in GDP per capita of a country should result in lower number of missing women.
The price elasticity of demand is lower in the short run than in the long run...
The price elasticity of demand is lower in the short run than in the long run when there is more scope to substitute other goods. Explain that using an example from local Palestinian environment .
For each of the following statements, indicate whether it is true, false, or uncertain and EXPLAIN...
For each of the following statements, indicate whether it is true, false, or uncertain and EXPLAIN WHY. a. In the long-run the typical monopolistically competitive firm earns no economic profit and that indicates that the firm is economically (productively) efficient. b. Monopolists have complete pricing freedom as they seek to maximize profits. c. In the short-run, if price drops below the average total cost, the perfectly competitive firm must shut down immediately.
Explain the true or false statement: In the long run firms in competitive markets can have...
Explain the true or false statement: In the long run firms in competitive markets can have different short run average cost curves.
True, False or uncertain?  Explain whether each of the following statement is true, false or uncertain. Start...
True, False or uncertain?  Explain whether each of the following statement is true, false or uncertain. Start your answer by selecting one of the three statements – “True”, “False” and “Uncertain” and then provide arguments to justify your selection (be brief and concise in less than 100 words). You need to make assumption clear, reasonable and explicit if making any. a. Nominal interest rates are always higher than real interest rates. Answer b. If the lockdown measure due to a further...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT