Question: Draw a standard long-run average cost curve. Identify on the graph and define economies of scale (or increasing returns to scale), constant returns to scale,
Draw a standard long-run average cost curve. Identify on the graph and define economies of scale (or increasing returns to scale), constant returns to scale, and diseconomies of scale (or decreasing returns to scale). Also identify and define the minimum efficient scale (MES). How does the relationship between MES and the market demand affect the structure of an industry? Specifically, how does this relationship affect the equilibrium number of competitors in a market?
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
