LONG-RUN AVERAGE COST: 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). See also | average cost | average total cost | variable input | fixed input | long run | quantity | economies of scale | increasing returns to scale | diseconomies of scale | decreasing returns to scale | minimum efficient scale |
