Question

Difference between short run cost curve and long run cost curve

Answer 1

hey mate here is your answer....

:The activity level does not change in the short run production function, whereas the firm can expand or reduce the activity levels in the long run production function. In short run production function the factor ratio changes because one input varies while the remaining are fixed in nature.....

That is why the long-run cost curve is called an 'Envelope', because it envelops all the short-run cost curves. The cost curves, whether short-run or long-run, are U-shaped because the cost of production first starts falling as output is increased owing to the various economies of scale....

..hope it's help you dear......