=+c. Next, suppose that there are no fixed costs in the long run. Instead, the production process
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=+c. Next, suppose that there are no fixed costs in the long run. Instead, the production process is such that the marginal product of each input is initially increasing but eventually decreasing, and the production process as a whole has initially increasing but eventually decreasing returns to scale. (A picture of such a production process was given in Graph 12.16 of the previous chapter.) Explain why the long-run AC curve is U-shaped in this case.
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Microeconomics An Intuitive Approach With Calculus
ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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