What is meant by Long run cost?
1 Answer
Long-run is a period of time in which all the factors of production are variable. Thus, in the long- run, the output can be increased by increasing capital equipment or by increasing the size of the existing plants or by building a new plant of greater production capacity. The long-run cost is the cost at which the firm operates in the long-run. The long-run cost curve is also called the planning curve because it shows optimal possibilities for expansion of output and thus helps the entrepreneur to plan his future investment activities. Before an investment is decided, the entrepreneur can choose any of a wide range of alternative investment defined by the state of technology.
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Write the meaning of various concepts of cost. Explain them. 1
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Explain the meaning and nature of total variable cost along with diagram 1
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Explain the meaning and nature of total cost along with diagram 1
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Differences between total fixed cost and total variable cost 1
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Differences between a Movement along and Shift in the Demand curve. 1
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Differences between Movement along a supply curve and shift in the supply curve 1