pts 4 Consider the long run total cost curve LRTC in the gra

pts 4. Consider the long run total cost curve (LRTC) in the graph below: 9,9? Average cost is greater at 02 than it is at Q. True or false? Explain.

Solution

False.

Average cost at Q1 is greater than average cost at Q2

Because Q2 is at the point if inflexion , at this point marginal cost is at minimum, and before average cost is continously falling.

So average cost at Q2 is less that average cost at Q1