frankinafishtank Posted May 14, 2011 Report Share Posted May 14, 2011 (edited) In my book it says that the X-axis is labelled output while the Y-axis is labelled cost on the LRAC curve.However, shouldn't the Y-axis be labelled cost PER UNIT?As a firm is achieving economies of scale and increases in output, it doesn't make sense to me that the average cost would drop (if it's not per unit) because the firm is producing more on a larger scale. Am I wrong or can someone explain this? Edited May 14, 2011 by frankinafishtank Reply Link to post Share on other sites More sharing options...
dogmatichurricane Posted May 14, 2011 Report Share Posted May 14, 2011 The term "average" cost itself indicates that it's per unit output. 2 Reply Link to post Share on other sites More sharing options...
frankinafishtank Posted May 14, 2011 Author Report Share Posted May 14, 2011 The term "average" cost itself indicates that it's per unit output.Ohh I see! *facepalm*Would I be penalized for labelling the axis as cost per unit though? Reply Link to post Share on other sites More sharing options...
dogmatichurricane Posted May 14, 2011 Report Share Posted May 14, 2011 I doubt you will unless your marker is pedantic. Reply Link to post Share on other sites More sharing options...
dessskris Posted May 14, 2011 Report Share Posted May 14, 2011 just want to confirm that the x-axis is labelled output and the y-axis is labelled cost.and no I don't think you'll be penalised on that. 1 Reply Link to post Share on other sites More sharing options...
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