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What Is Sometimes Called the "Long-Run Aggregate Supply Curve" Shows

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What is sometimes called the "long-run aggregate supply curve" shows the relationship between the price level and aggregate supply over a time period long enough to permit


Definitions:

Marginal Cost

The incremental cost associated with the production of an extra unit of a product or service.

Marginal Cost Curve

A curve that displays the additional cost associated with producing one more unit of output, typically showing how marginal cost changes with changes in production volume.

Total Cost Curve

A graph that shows the total cost incurred by a firm in the production of goods or services at different levels of output.

Diminishing Returns

The principle stating that if one factor of production is increased while others remain constant, the overall returns will eventually decrease after a certain point.

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