Draw a representative long-run average cost curve

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Industry studies often suggest that firms may have long-run average cost curves that show some output range over which there are  economies of scale and a wide range of output over which long-run average cost is constant; finally, at very high output, there are  diseconomies of scale.

a. Draw a representative long-run average cost curve, and indicate the minimum efficient scale.

b. Would you expect that firms in an industry like this would all produce about the same level of output? Why?

Reference no: EM13889092

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