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Q. 22.4LO

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Economics Today
Found in: Page 486

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Short Answer

Describe the long-run cost curves a typical firm faces and define a firm's minimum efficient scale

No costs are fixed within the long term.

A corporation can produce its product cheaply enough to supply it at a competitive price.

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Step by Step Solution

Step 1: Introduction

The medium term is a timespan over which all production and cost variables are uncertain. Firms ’ ability to change all overall costs, but they can only impact costs in the near term by modifying output levels. Therefore, while a firm may have a mono in the short run, it may face opposition in the long term.

Step 2: Explanation

The future is that the period of your time when all costs are variable. The future depends on the specifics of the firm in question—it isn't an exact period of your time. No costs are fixed within the long term. A firm can build new factories and buy new machinery.The minimum efficient scale (MES) is that the point on a price curve when

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