Industry studies often suggest that firms may havelong-run average cost curves that show some...

Question

Industry studies often suggest that firms may have
long-run average cost curves that show some output
range over which there are economies of scale
and a wide range of output over which long-run
average cost is constant; finally, at very high output,
there are diseconomies of scale.
a. Draw a representative long-run average cost
curve, and indicate the minimum efficient scale.
b. Would you expect that firms in an industry like
this would all produce about the same level of
output? Why?

Robert · Accepted Answer

Industry studies often suggest that firms may have long-run average cost curves that show some output 
range over which there are economies of scale and a wide range of output over which long-run average 
cost is constant; finally, at very high output, there are diseconomies of scale. 
a.

Industry studies often suggest that firms may have long-run average cost curves that show some output range over which there are economies of scale and a wide range of output over which long-run...

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