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Long Run Average Cost (or LAC)
-Constant Returns to Scale
-Increasing Returns to Scale
-Decreasing Returns to the Scale
-In the long run:
-Long run marginal cost(LMC) leads long run average cost(LAC):
Question
-What is relationship between long run average cost and long run marginal cost when long run average cost is constant?
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Cost in the Short Run Marginal Cost (or MC) is the cost of expanding output by one unit. As fixed costs have no impact on marginal cost, it can be given as: Average Total
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