1.

explain the derivation of long run average cost curve with the help of short run average cost curves.​

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Long Run Average Cost Curve

  • In the short run, some inputs are FIXED while the others are variable. On the other hand, in the long run, the FIRM can vary all of its inputs. Long run cost is the minimal cost of producing any given level of output when all individual FACTORS are variable.

  • The long run cost curve helps us understand the functional relationship between out and the long run cost of PRODUCTION. In this ARTICLE, we will look at understanding the long run average cost curve.


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