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The family of short-run cost curves consisting of average total cost, average variable cost, and marginal cost, all of which have U-shapes. Each is U-shaped because it begins with relatively high but falling cost for small quantities of output, reaches a minimum value, then has rising cost at large quantities of output. Although the average fixed cost curve is not U-shaped, it is occasionally included with the other three just for sake of completeness.
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Why is average cost and average variable cost are both you shaped?
the average variable cost curve and average cost curve are u- shaped because of the law of variable proportions.
What is the relationship between long-run average cost curve and short-run average cost curve?
what is the relationship between long run average cost curve and short run average cost curve?
How is a long-run average cost curve different from a short-run average cost curve?
The long-run average cost curve is longer.
A firm's marginal cost curve above the average variable cost curve is also?
A firm's short run supply curve
Why is the long run average cost curve known as the envelope curve or planning curve?
Long run average cost curve is known as envelope curve because it is formed by enveloping the short run average cost curves and it helps the entrepreneur in long term planning that is why it is also called planning curve.
Why is average cost and average variable cost are both you shaped?
the average variable cost curve and average cost curve are u- shaped because of the law of variable proportions.
What is the relationship between long-run average cost curve and short-run average cost curve?
what is the relationship between long run average cost curve and short run average cost curve?
How is a long-run average cost curve different from a short-run average cost curve?
The long-run average cost curve is longer.
Why short run cost curve is U - shaped?
The family of short-run cost curves consisting of average total cost, average variable cost, and marginal cost, all of which have U-shapes. Each is U-shaped because it begins with relatively high but falling cost for small quantities of output, reaches a minimum value, then has rising cost at large quantities of output. Although the average fixed cost curve is not U-shaped, it is occasionally included with the other three just for sake of completeness.
What is modern theory of cost?
Modern theory of cost is that the Economist belief that the average cost curve and marginal cost curve (AC & MC) are "L" shaped.
A firm's marginal cost curve above the average variable cost curve is also?
A firm's short run supply curve
What is the relationship between long run average cost curve and short run average ciost curve?
The relationship between these two curves is that a long run average cost curve consists of several short run average cost curves, each of which refers to a particular scale of operation. both curves are u shaped the short run avg cost curve rising because of labour specialisation and better spreading of fixed costs and it rises due to the law of diniminshing returns. the long run avg cost curve falls because of economies of scale and rises because of dis-economies. the long run avg cost curve must comprise of all the lowest points of each of the short run avg cost curve because no firm will operate at a level of higher costs in the long run than in the short run. the long run avg cost curve must always be equal to or lie below any short run avg cost curve because in the long run all factors of production can be variable.
Why is the long run average cost curve known as the envelope curve or planning curve?
Long run average cost curve is known as envelope curve because it is formed by enveloping the short run average cost curves and it helps the entrepreneur in long term planning that is why it is also called planning curve.
What is the relationship between the average cost curve and the production costs of a firm?
The average cost curve shows the average cost per unit of production for a firm. It is derived from the total cost curve, which represents the total cost of production at different levels of output. The average cost curve is U-shaped, indicating that as production increases, average costs initially decrease due to economies of scale, then increase due to diminishing returns. The relationship between the average cost curve and production costs is that the average cost curve reflects how efficiently a firm is producing goods or services in relation to its total costs.
What is a firm's short run supply curve?
A perfectly competitive firm's supply curve is that portion of its marginal cost curve that lies above the minimum of the average variable cost curve.
Why is the Marginal cost curve U shaped?
because sophie went to Nigeria
6 If the average total cost curve is falling what is necessarily true of the marginal cost curve If the average total cost curve is rising what is necessarily true of the marginal cost curve?
When average total cost curve is falling it is necessarily above the marginal cost curve. If the average total cost curve is rising, it is necessarily below the marginal cost curve.
