Connection with EOS and you will DR – you’re a lengthy work on while the other a short-run layout EOS – fall-in LRAC as the production grows. It’s a long run will set you back design. Is when the […]
EOS – fall-in LRAC as the production grows. It’s a long run will set you back design. Is when the enters is actually adjustable. Disagree between opportunities.
Explain the difference between long term and you will short run. DR may cause MC to increase, and you can EOS can cause LRAC to fall.
End – relationships between MC and DR is clear and you can direct
MC continue to be down whenever LRAC due to the fact LRAC try shedding. This is basically the ‘legislation off Mathematics’ – when the limited is leaner than average, average usually fall.
Relationships ranging from DR and EOS is actually quicker head and you can weakened, simply both are about costs. EOS and you will MC dating – just a mathematical style.
3 (a) A strong into the a completely aggressive sector and a strong with a dominance both seek to increase their money. Establish, with the aid of a diagram, why the levels off price and you may output could be more when you look at the the two areas. (more…)
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