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Two factors:
1) Economies of scale, which decrease the average cost per unit of a good by spreading their fixed cost between more and more units.
2) Increasing marginal costs, that increase the cost of production per unit.
Wiki User
∙ 12y ago
Wiki User
∙ 12y agoIn short run the business activities change fast, decreases or increases, Therefore the short run curve is you shape.
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What kind of relationship you postulate between short-run and long run average cost curves when these are not U shaped?
The type of relationship that you postulate between short-run and long-run average cost curves that is not U shaped is the external limiting relationship.
What kind of relationship would you postulate between short-run and long average cost curves when these are not U-shaped as suggested by the modern theories?
what kind of relationship would you postulate between short run and long run average cost curves when these are not u shaped as suggested by the modern theories.
Why some long-run average cost curves are steeper on the downward side than others?
why some long-run average cost curves are steeper on the downward side than others.
What is short-run cost function?
what is short-run cost function
Is the long run AC curve tangent to short run AC curves at their minimum points?
do the best
What kind of relationship you postulate between short-run and long run average cost curves when these are not U shaped?
The type of relationship that you postulate between short-run and long-run average cost curves that is not U shaped is the external limiting relationship.
What kind of relationship would you postulate between short-run and long-run average cost curves when these are not you-shaped as suggested by the modern theories?
what kind of relationship would you postulate between short run and long run average cost curves when these are not u shaped as suggested by the modern theories.
Why lac curve is called envelope curve?
Because it envelopes the Short Run Cost curves.
What kind of relationship would you postulate between short-run and long average cost curves when these are not U-shaped as suggested by the modern theories?
what kind of relationship would you postulate between short run and long run average cost curves when these are not u shaped as suggested by the modern theories.
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 some long-run average cost curves are steeper on the downward side than others?
why some long-run average cost curves are steeper on the downward side than others.
What is short-run cost function?
what is short-run cost function
Is the long run AC curve tangent to short run AC curves at their minimum points?
do the best
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 kind of relationship would you postlates between short run and long run average cost curves when these are U-shaped as suggested by the modern theories?
go ahead. Keep cheapening what a beautiful thing a committed relationship can be
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?
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.
