3. The long-run average cost of production is defined as: A. total cost divided by the quantity of output the firm chooses when at least one factor is fixed. B. total cost divided by the quantity of output the firm chooses when it can choose a production facility of any size. C. the quantity produced by a firm that can choose any size production facility. D. the quantity produced by a firm when at least one factor is fixed.
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The long-run average cost (LRAC) of production refers to the cost per unit of output when all factors of production are variable. In the long run, a firm can adjust all its inputs, including the size of its production facility, to achieve the most efficient scale Show more…
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