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  2. Long-run cost curve - Wikipedia

    en.wikipedia.org/wiki/Long-run_cost_curve

    In economics, a cost function represents the minimum cost of producing a quantity of some good. The long-run cost curve is a cost function that models this minimum cost over time, meaning inputs are not fixed. Using the long-run cost curve, firms can scale their means of production to reduce the costs of producing the good. [1]

  3. Cost curve - Wikipedia

    en.wikipedia.org/wiki/Cost_curve

    The total cost curve, if non-linear, can represent increasing and diminishing marginal returns.. The short-run total cost (SRTC) and long-run total cost (LRTC) curves are increasing in the quantity of output produced because producing more output requires more labor usage in both the short and long runs, and because in the long run producing more output involves using more of the physical ...

  4. Total cost - Wikipedia

    en.wikipedia.org/wiki/Total_cost

    The long run total cost for a given output will generally be lower than the short run total cost, because the amount of capital can be chosen to be optimal for the amount of output. Other economic models use the total variable cost curve (and therefore total cost curve) to illustrate the concepts of increasing, and later diminishing, marginal ...

  5. Average cost - Wikipedia

    en.wikipedia.org/wiki/Average_cost

    A long-run average cost curve is typically downward sloping at relatively low levels of output, and upward or downward sloping at relatively high levels of output. Most commonly, the long-run average cost curve is U-shaped, by definition reflecting economies of scale where negatively sloped and diseconomies of scale where positively sloped.

  6. Long run and short run - Wikipedia

    en.wikipedia.org/wiki/Long_run_and_short_run

    In the long-run, firms change production levels in response to (expected) economic profits or losses, and the land, labour, capital goods and entrepreneurship vary to reach the minimum level of long-run average cost. A generic firm can make the following changes in the long-run: Enter an industry in response to (expected) profits

  7. Minimum efficient scale - Wikipedia

    en.wikipedia.org/wiki/Minimum_efficient_scale

    Modern cost theory and recent empirical studies [5] [6] suggest that, instead of a U-shaped curve due to the presence of diseconomies of scale, the long run average cost curve is more likely to be L-shaped. In the L-shaped cost curve, the long run cost would keep fixed with a significantly increased scale of output once the firm reaches the ...

  8. Long-run average cost - Wikipedia

    en.wikipedia.org/?title=Long-run_average_cost&...

    Retrieved from "https://en.wikipedia.org/w/index.php?title=Long-run_average_cost&oldid=376842685"

  9. Diseconomies of scale - Wikipedia

    en.wikipedia.org/wiki/Diseconomies_of_scale

    The Long Run Average Cost (LRAC) curve plots the average cost of producing the lowest cost method. The Long Run Marginal Cost (LRMC) is the change in total cost attributable to a change in the output of one unit after the plant size has been adjusted to produce that rate of output at minimum LRAC.

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