Characteristics of Long run Average Cost Curve

  The following characteristics of LAC curve should be noted The LAC curve is tangential to the various SAC curves. It is drawn to cover them and is often drown as Envelope curve as no point as SAC curve can ever be below the LAC curve. The LAC curve is U-shaped of like a dish. […]

Cost Analysis in the Long Run ( Period)

The long Period The long period is defined as the period that is long enough for the inputs of all factors of production to be varied. In this period no factor is fixed, all are variable factors. Firm has enough time to change its scale of production. It can purchase and install new machinery or […]