Except for one point, the short run average cost must always be the long run average cost. 1)less than 2)greater than 3)the same as

greater than

Explanation:

In the long run, all factors of production are variable. The short run is a time horizon where all factor input is variable, that is, no fixed cost.

In the short run the fixed input remain the same with only variable factor changing, this makes the short run average cost to fall at the beginning to a minimum and then start rising, hence the U-shape of the short run average cost curve.

in the long run all cost can be varied and because of the ability of the firm to vary plant size to achieve optimum cost, long run average cost though will fall to point and also rise like the short run average cost  (SRAC) but not as sharp as the short run average cost. This is evident in the shape of the Long run average cost curve which is flatter than the short run average cost curve.

In the short run, the shape of the average total cost curve (ATC) is U-shaped. The, short run average cost curve falls in the beginning, reaches a minimum and then begins to rise. The reasons for the average cost to fall in the beginning of production are that the fixed factors of a firm remain the same. The change only takes place in the variable factors such as raw material, labor, etc.

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