Lrtc can be explained with
Answers
Answer:
Long-run cost curve
In economics, a cost function represents the minimum cost of producing a quantity of some good. The long-run cost curve is a cost function that models this minimum cost over time, meaning inputs are not fixed. Using the long-run cost curve, firms can scale their means of production to reduce the costs of producing the good.
Explanation:
(LRTC) is the cost function that represents the total cost of production for all goods produced.
Long-run average cost (LRAC) is the cost function that represents the average cost per unit of producing some good.
Long-run marginal cost (LRMC) is the cost function that represents the cost of producing one more unit of some good.
The idealized "long run" for a firm refers to the absence of time-based restrictions on what inputs (such as factors of production) a firm can employ in its production technology. For example, a firm cannot build an additional factory in the short run, but this restriction does not apply in the long run. Because forecasting introduces complexity, firms typically assume that the long-run costs are based on the technology, information, and prices that the firm faces currently. The long-run cost curve does not try to anticipate changes in the firm, the technology, or the industry. It only reflects how costs would be different if there were no constraints on changing the inputs in the current period.