The Long-Run Average Total Cost (LRATC) curve envelopes a family of short-run ATC curves and is known as the 'planning curve' (or envelope curve) because it guides a firm's long-term decisions regarding plant size and scale of operations.

A profit-maximizing firm will continue expanding output as long as an extra unit adds more to revenue than to cost (i.e., where Marginal Revenue > Marginal Cost), continuing until $MR = MC$.

Profit maximization specifically occurs where marginal revenue equals marginal cost ($MR = MC$) and the total revenue minus total cost gap is maximized. The point where Average Total Cost (ATC) is minimized represents productive efficiency, which does not generally coincide with profit maximization unless economic profit happens to be zero in long-run competitive equilibrium.

Economic distinction between opportunity cost and explicit out-of-pocket costs:

• Full-time education sacrificed to take up employment represents foregone alternative human capital building (an opportunity cost).
• Returns from potential entrepreneurial self-employment sacrificed represent foregone earnings (an opportunity cost).
• Personal leisure hours given up to work represent foregone utility of leisure (an opportunity cost).
• Transportation and commuting fares are direct monetary expenditures (explicit accounting costs), not foregone benefits of sacrificed alternatives.