Share This Article:

Economic Definition of long-run average cost. Defined.

Offline Version: PDF

Term long-run average cost Definition: The per unit cost of producing a good or service in the long run when all inputs are variable. In other words, long-run total cost divided by the quantity of output produced. Long-run average cost is based on economies of scale (or increasing returns to scale) and diseconomies of scale (or decreasing returns to scale).

 

« long-run aggregate supply curve | long-run average cost curve »

Permalink: http://glossary.econguru.com/economic-term/long-run+average+cost

Alphabetical Reference to Over 2,000 Economic Terms