10. CHAPTER. Output and Costs. After studying this chapter you will be able to. Distinguish between the short run and the long run Explain the relationship between a firm’s output and labor employed in the short run
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Output and Costs
ATC1is the ATC curve for a plant with 1 knitting machine.Long-Run Cost
ATC2is the ATC curve for a plant with 2 knitting machines.Long-Run Cost
ATC3is the ATC curve for a plant with 3 knitting machines.Long-Run Cost
ATC4is the ATC curve for a plant with 4 knitting machines.Long-Run Cost
The least-cost way of producing 13 sweaters a day.Long-Run Cost
Figure 10.8 illustrates the long-run average cost (LRAC) curve.
Figure 10.8 illustrates economies and diseconomies of scale.