Suppose we have a single produet firm. The firm uses normal, full eosting with a normal volume
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Suppose we have a single produet firm. The firm uses normal, full eosting with a normal volume equal to its effieient scale or output level (where average eeonomie eost is a minimum). The LIA is eonstrueted by setting the slope equal to marginai eost at the effieient output level and the intercept so the two total eost expressions agree at that point. Why is there no differenee between full and variable eosting in this instance?
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