The short-run total cost (SRTC) and long-run total cost (LRTC) curves are increasing in the quantity of output produced because producing more output requires more labor usage in both the short and long runs, and because in the long run producing more output involves using more of the physical capital input and using more of either input involves incurring more input costs. Short-run total cost (SRTC) and long-run total cost (LRTC) curves The total cost curve, if non-linear, can represent increasing and diminishing marginal returns. Long-run average total cost (LRAC or LRATC).Short-run average variable cost (AVC or SRAVC).Short-run average total cost (SRAC or SRATC).These can be combined in various ways to express different cost concepts (with SR and LR often omitted when the context is clear): one from the first group (SR or LR) none or one from the second group (A, M, or none (meaning “level”) none or one from the third group (F, V, or T) and the fourth item (C).įrom the various combinations we have the following short-run cost curves: M = marginal (for an additional unit of output).LR = long-run (cost spent on renewable materials e.g equipment).SR = short run (costs spent on non-reusable materials e.g raw materials).There are standard acronyms for each cost concept, expressed in terms of the following descriptors: ( June 2023) ( Learn how and when to remove this template message) Unsourced material may be challenged and removed. Please help improve this section by adding citations to reliable sources.
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