x

Cost per unit and the LRAC curve

Cost per unit and the LRAC curve

Long-run average cost curve with output on the horizontal axis and cost per unit on the vertical axis, showing economies of scale, minimum efficient scale, and diseconomies of scale

Economies of scale mean a firm's long-run average cost falls as it expands. Diseconomies of scale mean average cost rises once the firm becomes too large or complex.

3.3.3 Economies and diseconomies of scale Lesson

  1. A Level
  2. /Economics
  3. /3.3.3 Economies and diseconomies of scale