ECO100Y5 Chapter Notes - Chapter 8: Marginal Product
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ECO100Y5 Full Course Notes
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Chapter 8 reading notes in the long run, there are numerous ways to produce any given output. Only when it is equal that you can use the cost minimizing method. profit maximizing firms adjust the quantities of factors they use to the prices of the factors givne by the market. Since all costs are variable in the long run, we don"t need to distinguish among avc, afc, atc. In the long run, there is only one lrac for any given set of input prices: when lrac falls as output rises, the firm is said to have economies of scale. : a situation in which output increases more than in proportion. All available constant returns is increased. a firm in this situation is a constant cost firm. : a situation in which output increases in proportion to inputs as the scale of production decreasing returns a firm"s production increases. a firm in this situation is an increasing-cost firm.