WHY DOES LAC U SHAPED
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➡️ LAC curve is derived from short run average cost curves Whereas LAC is a continuous curve. The reason behind the U-shape of the curve is the Law of Returns to Scale. According to this law, as plant size increases, the average cost of production decreases due to economies of scale.
➡️ LAC curve is derived from short run average cost curves Whereas LAC is a continuous curve. The reason behind the U-shape of the curve is the Law of Returns to Scale. According to this law, as plant size increases, the average cost of production decreases due to economies of scale.
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LAC curve is derived from short run average cost curves. ... Whereas LAC is a continuous curve. The reason behind the U-shape of the curve is the Law of Returns to Scale. According to this law, as plant size increases, the average cost of production decreases due to economies of scale.
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