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Explain How the Long-Run Average Cost Curve Is Constructed Graphically

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Essay

Explain how the long-run average cost curve is constructed graphically.


Definitions:

Percentage

A percentage is a way of expressing a number as a fraction of 100.

Expected Utility

The sum of the utilities coming from all possible outcomes of a deal, weighted by the probability of each occurring.

Risk-loving

An inclination to engage in behaviors or decisions that involve exposure to uncertainty, with the potential for higher rewards.

Expected Value

The sum of the payoffs associated with each possible outcome of a situation weighted by its probability of occurring.

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