<P> The long - run marginal cost curve is shaped by returns to scale , a long - run concept , rather than the law of diminishing marginal returns , which is a short - run concept . The long - run marginal cost curve tends to be flatter than its short - run counterpart due to increased input flexibility as to cost minimization . The long - run marginal cost curve intersects the long - run average cost curve at the minimum point of the latter . When long - run marginal costs are below long - run average costs , long - run average costs are falling ( as to additional units of output ) . When long - run marginal costs are above long run average costs , average costs are rising . Long - run marginal cost equals short run marginal - cost at the least - long - run - average - cost level of production . LRMC is the slope of the LR total - cost function . </P>
<P> The long - run marginal cost curve is shaped by returns to scale , a long - run concept , rather than the law of diminishing marginal returns , which is a short - run concept . The long - run marginal cost curve tends to be flatter than its short - run counterpart due to increased input flexibility as to cost minimization . The long - run marginal cost curve intersects the long - run average cost curve at the minimum point of the latter . When long - run marginal costs are below long - run average costs , long - run average costs are falling ( as to additional units of output ) . When long - run marginal costs are above long run average costs , average costs are rising . Long - run marginal cost equals short run marginal - cost at the least - long - run - average - cost level of production . LRMC is the slope of the LR total - cost function . </P>
why long run cost curve is flatter than short run cost curve
why long run cost curve is flatter than short run cost curve
increased input flexibility as to cost minimization
increased input flexibility as to cost minimization