Short-run costs are never equal or lower than long-run cost. Indicate

Short-run costs are never equal or lower than long-run cost.

Indicate whether the statement is true or false

ANSWER

False. Since the long-run curve “envelopes” all short-run curves there is always a level of output where short-run cost are equal to long-run cost. However, short-run cost can never be lower than long-run cost.