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What Is a Long-Run Supply Curve? What Does a Long-Run

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What is a long-run supply curve? What does a long-run supply curve look like on a perfectly competitive market graph?


Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual units of output.

Capacity

The maximum level of output that a company can sustain to make a product or provide a service, influenced by available resources and constraints.

Machine-Hours

The total hours a machine is operated within a given period, often used to allocate manufacturing overhead.

Unused Capacity

The difference between a company's actual production and its maximum potential production if all resources were fully utilized.

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