Long run average cost curve is often called the planning curve of the firm by some economists because a firm plans to produce any output in the long run by choosing a plant on the LAC curve corresponding to the given output. The LAC curve reveals to the firm that how large should be plant for producing a certain output at the least possible cost. Thus while making decisions regarding the choice of a plant, the firm has to look at its long run average cost curve enveloping a family of plant curves.
LAC Called planning Curve
If you think it is Useful, Share it to the world
by clicking following icons
Subscribe to:
Post Comments (Atom)
0 Comments Here::
Post a Comment