Let us summarize the features of the behavior of the LAC

Let us summarize the features of the behavior of the LAC -...

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Let us summarize the features of the behavior of the LAC . LAC is also known as an envelope curve. It passes from outside the SACs. At least one of the SACs is tangential to LAC. This is essential because the advantages available in the long run must be relevant to the respective short run possibilities. None of the SACs can ever intersect LAC. This is because of the fact that if SAC intersects LAC then some portion of SAC will lie below LAC. It would suggest some advantages that firm can enjoy in the short run are not
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Unformatted text preview: available to it in the long run. This is absurd since LAC is a chain of SACs. LAC is also U shaped, showing the falling, the minimum and the rising phases. It is less pronounced or flatter than SACs. This is because more factors become divisible and variable in the long run. Some of the factors may still continue to be fixed even in the long run to make it fall and rise. LMC (like SMC) intersects LAC at the minimum point of the LAC. The reason for such behavior is similar to that in the short run....
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