Increasing, Constant, and Decreasing Returns to Scale Shape of the Average Long-Run and Short-Run Cost Curves Returns to Scale Diseconomies of Scale Long-Run Average Cost Curve Affect Industry Competitors Technology Shifts the Long-Run Average Cost Curve Law of Diminishing Marginal Returns...
Average Cost Explained The concept of average cost helps determine the amount spent per unit of an item. It is widely used in various contexts of finance or business to measure the price of products, expenses incurred to produce them, or the profit level that can be earned from manufacturing...
We saw above that the U-shape of the short-run average cost curve is explained with the law of variable proportions. But the shape of the long-run average cost curve depends upon the returns to scale. Since in the long run all inputs including the capital equipment can be altered,...
then the long-run average cost curve is the curve which has scallops in it. This heavily scalloped long-run average cost curve consists of some segments of all the short-run average cost curves as explained above.
The relationship between average and marginal cost can be easily explained via a simple analogy. Rather than think about costs, think about grades on a series of exams. Assume that your average grade in a course is 85. If you were to get a score of 80 on your next exam, this score wo...
By the early 19th Century, using the arithmetic mean/average had become a common method of finding the most representative value from a set of data points. Friedrich Von Gauss, the most brilliant (andpetulant) mathematician of his time, explained in 1809: ...
What proportion of the variation of wages across workers is explained by factors that can be measured? What are the other factors that explain wage differences but are difficult to measure? Explain what effect a reduction in productivity has on wage-settin...
inflation tax laffer curvedeficitsinflationary financeCross-country differences in average inflation rates among 30 countries are well explained by differences in estimated "shoe leather" cost functions relating these costs to the inflation tax. The shoe leather costs are estimated by means of the ...
That said all this is explained in child friendly manner that prepares rather than worries your child about the new adventure that they are about to embark on. The questions/ conversation starters throughout the book are another lovely feature as they encourage your little one to share their tho...
The lovely blanket that inspired me was made by Julie atLittle Woolie, and I must say that I’m a bit embarrassed that my blanket came out so close to hers; despite some efforts I made at the beginning to make them different, they do look so alike, particularly at first glance. I’...