The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3
-If marginal product increases with an increase in the variable input, the marginal cost must also increase as more units of the input are hired.
Definitions:
Availability Of Substitutes
The extent to which similar or alternative products and services are accessible to consumers, influencing their choices and market demand.
Linear Demand
An economic model where demand for a good or service changes proportionately with changes in price.
Unit Elastic
A situation in demand or supply where the elasticity is exactly one, indicating that a change in price results in a proportionate change in the quantity demanded or supplied.
Total Revenue
The total amount of money received by a firm from selling its goods or services.
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