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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 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 the short run average cost curve of a firm might be you shaped and explain the link between the short run average cost curve and long run average cost curve of a firm?
The short-run average cost (SRAC) curve is typically U-shaped due to economies of scale at lower levels of production, where increasing output leads to lower average costs, followed by diseconomies of scale at higher levels, resulting in rising average costs. This U-shape reflects the initial benefits of spreading fixed costs over more units and the eventual inefficiencies as production scales up. The long-run average cost (LRAC) curve is derived by taking the lowest points of various SRAC curves at different levels of output, representing the most efficient scale of production in the long run, where all inputs can be adjusted. Therefore, the LRAC serves as a boundary encompassing the various short-run cost curves, illustrating the minimum average costs achievable at different output levels.
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 lac curve is called envelope curve?
Because it envelopes the Short Run Cost curves.
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
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 the short run average cost curve of a firm might be you shaped and explain the link between the short run average cost curve and long run average cost curve of a firm?
The short-run average cost (SRAC) curve is typically U-shaped due to economies of scale at lower levels of production, where increasing output leads to lower average costs, followed by diseconomies of scale at higher levels, resulting in rising average costs. This U-shape reflects the initial benefits of spreading fixed costs over more units and the eventual inefficiencies as production scales up. The long-run average cost (LRAC) curve is derived by taking the lowest points of various SRAC curves at different levels of output, representing the most efficient scale of production in the long run, where all inputs can be adjusted. Therefore, the LRAC serves as a boundary encompassing the various short-run cost curves, illustrating the minimum average costs achievable at different output levels.
What is a real life example of a normal curve called a bell curve?
Height is an example of a normal curve. Most people will be around average height, with some being short or tall, and very few being very short or very tall.
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.
How do you address a long envelope?
The same as you would a short envelope.
When is the minimum possible short-run average costs are equal to long-run average cost?
the long run curve is at a minimum point
Is envelope a short e sound?
Yes, the word "envelope" has a short e sound, as in 'en-vel-op'.
