Today we will continue to study costs of production. We will focus on long-run costs today. You should read the text chapter identified below in the homework section, watch the related videos for help in understanding this material, do the activities identified, in the homework section and be prepared for the Problem of the Day. This page contains all the information you need for today's class. Use the table of contents on the right to help you navigate.
Read Mankiw (Chapter 13).After reading the chapter and watching the video below you should be able to respond to each of the following prompts.
Explain why the long-run average total cost curve (LRATC) is U-shaped.
Define economies of scale and the factors that cause it.
Define diseconomies of scale and the factors that cause it.
Problem of the Day: You will work cooperatively with your partner to construct a response to the following prompt.
Use a diagram and words to explain the factors that determine the shape of a firm's marginal and average total cost curves, while explaining the relationship in the short-run between them.
Lecture
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