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27 de may. de 2021 · LRATC is the average cost per unit of output over the long run, where all inputs are variable and the scale of production is changeable. The LRATC curve shows the lowest total cost to produce a given level of output and has three phases: economies of scale, constant returns to scale, and diseconomies of scale.
Calculate long run total cost. Identify economies of scale, diseconomies of scale, and constant returns to scale. Interpret graphs of long-run average cost curves and short-run average cost curves. Analyze cost and production in the long run and short run. The long run is the period of time when all costs are variable.
Learn how the long-run average cost (LRAC) curve shows the lowest cost per unit at each level of output, assuming all factors are variable. See how the LRAC curve is derived from the short-run average total cost (ATC) curves and why the minimum points of the short-run ATC curves may not lie on the LRAC curve.
Learn how the long-run average total cost curve is derived from the short-run average total cost curves and how it reflects the economies and diseconomies of scale. Watch an example of a food truck business and see the video transcript and questions.
Learn how firms choose their production technology and scale of production to minimize costs in the long run. See examples of how labor, machines, and economies of scale affect the long run average total cost curve.
The long-run average cost (LRAC) curve shows the firm’s lowest cost per unit at each level of output, assuming that all factors of production are variable. The LRAC curve assumes that the firm has chosen the optimal factor mix, as described in the previous section, for producing any level of output.
Learn how a firm chooses its mix of factors of production and its scale of operations in the long run. The long run average cost curve shows the lowest possible cost for a given level of output and reflects economies and diseconomies of scale.
