Question

Why is the long run average cost curve called planning curve?

Answer 1

Answer:

=> Because, the firm plans to produce an output in the long run by choosing a plant on the long run average cost curve corresponding to its output.✨✨✨✨✨✨

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Answer 2

Answer -

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• A long run average cost curve is known as a planning curve. This is because a firm plans to produce an output in the long run by choosing a plant on the long run average cost curve corresponding to the output. It helps the firm decide the size of the plant for producing the desired output at the least possible cost.

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