How can the extent to which the presence of economies and diseconomies of scale in an industry help account for the size and the number of firms in that industry? That is, if economies of scale are quite extensive in a particular industry, would you expect a large number of relatively small firms or a small number of relatively large firms operating within that industry? What if diseconomies of scale set in at a relatively small output level?
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Economy of scale describes the shape of the long run average total cost curve. If LRATC rises proportionately less than output, the firm is said to have economies of scale. The LRATC slopes downward. In other words, each additional unit of output costs it less than the prior one. In this case, the ...
Solution Summary
How economies of scale determines the shape of the long run average total cost curve
... As discussed above, both curves have shapes similar to ... are same for all production levels Shape of TVC ...Long run average cost is a key indicator of a phenomenon ...
... which a firm faces in the long run (ie when ... LRAC are generally flatter than short run average cost curve. ... some industries, the LRAC is L- shaped, and economies ...
... The shape of the long-run average cost curve is ...curve of my organization is U-shaped, which is ... The long run average cost curve for the company is given below: ...
... Draw a representative long-run average cost curve, and indicate the ... can be decision variable, including the ... a U-shaped long-run average cost curve -LRAC (refer ...
... the Short Run: Law of Diminishing Returns â?¢ Long run Cost Curves. ... variable cost) curve is a U shape, demonstrating that ...cost) curve is also U-shapes, but is ...
... This type of shape can be explained by diminishing returns. ... A typical short-run average total cost curve is U shaped. ... Production and Cost in the Long-Run. ...
... www.answers.com/topic/long-run-average-total-cost-lratc www ... differences in following three Long Run Average Cost Curves (LRAC ... What is the shape of your company's ...
... In turn, from the long-run total cost curve it is ...cost curve will have a different shape. ... of increasing returns to scale, long-run average cost will eventually ...
