What is the long-run average cost curve? What are the three ranges of output and in what order do they occur? Briefly define each of the three ranges
What will be an ideal response?
The long-run average cost curve shows the lowest average cost at which it is possible to produce each output when the firm has time to change both its labor force and its plant size. The long-run average cost curve is U-shaped and shows three possible production ranges. In order, these ranges are: economies of scale, constant returns to scale, and diseconomies of scale. Economies of scale are when a firm increases its output and its average total cost decreases. Constant returns to scale are when a firm increases its output and its average total cost does not change. Finally, diseconomies of scale are when a firm increases its output and its average total cost increases.
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If you invest $10,000 in a bond that earns 8% interest per year, how many years will it take to double your money?
A) 1 year and 3 months B) 2 years and 6 months C) 8 years D) 8 years and 9 months
What are the merits and demerits of unemployment compensation as a built-in stabilizer? Can you think of any changes in unemployment compensation that might improve its effectiveness as a stabilizing technique?
What will be an ideal response?