Friday, November 27, 2009

Why might unit costs ( ie average costs) fall/rise with output in th elong run?

i have this question in th economics part of my course, i am unsure of the answer and am just looking to clear it up , ta



Why might unit costs ( ie average costs) fall/rise with output in th elong run?windows xp sp2





unit cost will change with economies of scale........usually falls down.......for example, if you were to build a factory to produce, cars, and you only make one car....the unit cost would be high...,now if you made 1000 cars....it would be lower.....if you made 2000 cars, well, lower again....



Why might unit costs ( ie average costs) fall/rise with output in th elong run?microsoft sql server internet explorer



Cost of raw materials increases. Fixed costs increase (Electricity, rent, etc.).
In the Long run it is basically because of economies of scale and diseconomies of scale!!!

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