Economy, asked by kirat3519, 1 year ago

Why long run average cost curve is called planning curve?

Answers

Answered by ranjanalok961

Long-run cost curve is a planning curve because it is a guide to the entrepreneur to plan his output. Long-run average cost is derived fromshort-run cost curves.  LAC curve is the locus of points denoting the leastcost of producing the corresponding output. ... LAC curve is also called'envelope curv

Answered by gratefuljarette

A long-term, average cost curve is considered a preparation curve because a company plans to generate a long-term production by choosing a plant on the product's long-run average cost curve.

Explanation:

The company determines the scale of the plant at the least possible cost to produce the required production. The long-run cost curve is a curve of preparation and managing the performance is a reference for the entrepreneur.
Total long-run costs are calculated from short-run expense curves. The locus of the points representing the least cost of producing the same product is the LAC graph. LAC curve is also known as a curve envelope.

Learn more about long run average cost

Explain the salient features of long run average cost curve

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