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Unformatted text preview: Decreasing returns to scale or diseconomies of scale: an increase in a firms scale of production leads to higher costs per unit produced Long run average cost curve: the envelope of a series of short run cost curves Minimum efficient scale: the smallest size at which the long-run average cost curve is at its minimum Optimal scale of plant: the scale of plant that minimizes average costs Long run competitive equilibrium: when p=srmc=srac=lrac and profits are zero Present value: price/(1+rate)^n ,n is the number of years ; PV=( R) / (1+r)^t Chapter9: Long Run Costs and Output Decisions Monday, October 03, 2011 2:51 PM Econ 2106 Page 1...
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- Fall '06