QuestionMay 24, 2025

In the Long Run (LR),when should a firm continue to produce? MClt ATC MC=ATC MCgt ATC

In the Long Run (LR),when should a firm continue to produce? MClt ATC MC=ATC MCgt ATC
In the Long Run (LR),when should a firm continue to produce?
MClt ATC
MC=ATC
MCgt ATC

Solution
3.5(227 votes)

Answer

MC = ATC Explanation 1. Understand Long Run Production Decision In the long run, a firm should continue to produce if it can cover its average total costs (ATC). 2. Analyze Conditions The condition MC = ATC indicates that the firm is producing at the minimum point of the ATC curve, which is optimal for production in the long run.

Explanation

1. Understand Long Run Production Decision<br /> In the long run, a firm should continue to produce if it can cover its average total costs (ATC).<br /><br />2. Analyze Conditions<br /> The condition $MC = ATC$ indicates that the firm is producing at the minimum point of the ATC curve, which is optimal for production in the long run.
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