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2. (18 points) Suppose that in addition to labor input, the firm uses ( K,, K,, K, ) to produce three output levels, (91, 92,93

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2. (18 points) Suppose that in addition to labor input, the firm uses ( K,, K,, K, ) to produce three output levels, (91, 92,93 ) in the long run. Explain why the long-run average cost curve is the lower envelope of its short-run counterparts graphically. That is, AC(q,) = SAC(q,, K)

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