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Shifts in cost curves

Shifts in cost curves - • Per unit cost is falling...

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Shifts (changes) in Cost Curves Change in technology causes a shift up in production function. For every unit of input, you’re getting more output o This causes MC and ATC to shift down Change in price of inputs up o This causes MC and ATC to shift up Long Run With a larger factory, we could produce more snack cakes and perhaps we could produce them at a lower per unit cost.
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Unformatted text preview: • Per unit cost is falling because you’re producing more quantity faster than your cost. • Long- run ATC curve is the envelope around the various short- run ATC curves • Economies of scale- when you get bigger and able to produce things cheaper • Diseconomies of scale- when you get bigger but cost/ unit increases...
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