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The following chart shows three different costs: Cost A, Cost B, Cost C. For each cost, the chart shows the total cost and cost per unit at two different volumes within the same relevant range. Based on this information, identify each cost as fixed, variable or mixed.
Long-run Average Total Cost
The average cost per unit of output when all inputs, even physical capital, are adjustable, over a sufficient time period.
Economies of Scale
Cost advantages that enterprises obtain due to their scale of operation, characterized by a reduction in average cost per unit when output is increased.
Diseconomies of Scale
The phenomenon where production costs per unit increase as the volume of output increases.
Constant Returns to Scale
A situation in economics where increasing the inputs in production proportionately increases the output.
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