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LONG-RUN MARGINAL COST CURVE: A graphical representation of the relationship between long-run marginal cost and the quantity of output produced. Like other marginal curves, the long-run marginal cost curve follows the average-marginal rule relative to the long-run average cost curve. In all outward appearance, the long-run marginal cost curve looks very much like the short-run marginal cost, that is, it is U-shaped. However, the U-shape is attributable to returns to scale rather than increasing and decreasing marginal returns.

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AUTONOMOUS SAVING

Household saving that does not depend on income or production (especially disposable income, national income, or even gross domestic product). That is, changes in income do not generate changes in saving. Autonomous saving is best thought of as a baseline level of saving (usually negative) that the household sector undertakes in the unlikely event that income falls to zero. It is measured by the intercept term of the saving function or the saving line. The alternative to autonomous saving is induced saving, which does depend on income.

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