6. In the long run, a producer can change its fixed input and its level of fixed cost. By accepting higher fixed cost, a firm can lower its variable cost for any given output level, and vice versa. The long-run average total cost curve shows the relationship between output and average total cost when fixed cost has been chosen to minimize average total cost at each level of output. A firm moves along its short -run average total cost curve as it changes the quantity of output, and it returns to a point on both its short -

run and long -run average total cost curves once it has adjusted fixed cost to its new output level.