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    The Long Run Average Cost Curves

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    Andres Bonifacio College
    The document discusses long run average cost curves, which indicate the lowest average cost of production at different output levels when a firm varies its size over the long run. It also discusses concepts like constant long-run average cost, minimum efficient scale, and how economies and diseconomies of scale can impact a firm's long-run average cost curve. Diagrams are included to illustrate these concepts.

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    © All Rights Reserved
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    The Long Run Average Cost Curves

    Uploaded by

    Andres Bonifacio College
    12 views10 pages
    The document discusses long run average cost curves, which indicate the lowest average cost of production at different output levels when a firm varies its size over the long run. It also discusses concepts like constant long-run average cost, minimum efficient scale, and how economies and diseconomies of scale can impact a firm's long-run average cost curve. Diagrams are included to illustrate these concepts.

    Original Description:

    Production Cost and the Firm

    Original Title

    Repoort Micro

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    The document discusses long run average cost curves, which indicate the lowest average cost of production at different output levels when a firm varies its size over the long run. It also discusses concepts like constant long-run average cost, minimum efficient scale, and how economies and diseconomies of scale can impact a firm's long-run average cost curve. Diagrams are included to illustrate these concepts.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    12 views10 pages

    The Long Run Average Cost Curves

    Uploaded by

    Andres Bonifacio College
    The document discusses long run average cost curves, which indicate the lowest average cost of production at different output levels when a firm varies its size over the long run. It also discusses concepts like constant long-run average cost, minimum efficient scale, and how economies and diseconomies of scale can impact a firm's long-run average cost curve. Diagrams are included to illustrate these concepts.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    The Long Run Average

    Cost Curves

    Long Run Average


    Cost Curves

    A curve that indicates


    the lowest average cost
    of production at each
    rate of output when the
    size, or scale, of the firm
    varies; also called the
    planning curve.

    NSTANT LONG-RUN AVERA


    COST
    A cost that occurs
    when, over some range
    of
    output,
    long-run
    average cost neither
    increases
    nor
    decreases
    with
    changes in firm size

    MINIMUM
    EFFICIENT
    TheSCALE
    lowest rate

    of
    output
    at
    which
    a
    firm
    takes
    full
    advantage
    of

    EXHIBIT
    8
    Short-Run Average Total Cost Curves from Long Run
    Average Cost Curves

    EXHIBIT
    9
    Many Short-Run Average Total Cost Curves form a Firms
    Long Run Average Cost Curves

    Economies & Diseconomies of Scale

    Economies
    of scale
    LRAC

    Economies & Diseconomies of


    Scale
    Economies
    of scale

    Constant
    returns
    to scale
    LRAC

    Economies & Diseconomies of


    Scale
    Economies
    of scale

    Constant
    average
    cost

    Diseconomies
    of scale
    LRAC

    EXHIBIT 10
    A Firms Long Run Average Cost Curves

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