Th3.3: Shift and Movement of the LRAC Curve Flashcards
1
Q
The long run average cost curve is a boundary representing…
A
the minimum level of average costs attainable at any given level of output
2
Q
Points below the LRAC are…
A
unattainable
3
Q
Producing above the LRAS is…
A
inefficient
4
Q
What is movement along the LRAC due to?
A
a change in output which changes the average cost of production due to internal economies/diseconomies of scale
5
Q
Why might a shift occur?
A
can occur due to external economies/diseconomies, taxes or technology, which affects the cost of production for a given level of output
