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The long-run average cost curve is often saucer-shaped. Fill in the blanks to make the following statements about the LRAC curve correct.
a. Over the range of output where the LRAC curve is falling, the firm is experiencing ______ or ______. As output increases, average costs are
b. When the LRAC curve reaches its minimum, the firm has reached its ______. If the curve is flat over some range of output, we say the firm is exhibiting ______.
c. Over the range of output in which the LRAC curve is rising, the firm is experiencing ______ or ______. As output increases, average costs are
d. The LRAC curve represents the ______ for each level of output.
e. Each short-run average total cost curve is ______ at some point to the LRAC curve. The LRAC curve shows the lowest possible cost of producing any output when all factors are ______. The SRATC curve shows the lowest possible cost of producing any output when one or more factors are ______.
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