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PLANNING CURVE: Another term for the long-run average cost curve (LRAC). Using the name planning curve indicates that the long-run average cost curve is used to "making plans" especially concerning the desired scale of operations of a firm. That is, in the long run a firm will seek the plant size that maximizes long-run profit by equating long-run marginal cost and marginal revenue. It will then pick out the appropriate plant size off the long-run average cost with the minimum short-run average total cost.
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MARGINAL COST AND LAW OF DIMINISHING MARGINAL RETURNS Decreasing then increasing marginal cost, reflected by a U-shaped marginal cost curve, is the result of increasing then decreasing marginal returns. In particular the decreasing marginal returns is caused by the law of diminishing marginal returns. As such, the law of diminishing marginal returns affects not only the short-run production of a firm but also the cost of short-run production. This translates into a positively-sloped supply curve for profit-maximizing competitive firms.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet looking to buy either a genuine down-filled snow parka or throw pillows for your living room sofa. Be on the lookout for poorly written technical manuals.
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The standard "debt" notation I.O.U. does not mean "I owe you," but actually stands for "I owe unto..."
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"I feel sorry for the person who canžt get genuinely excited about his work. Not only will he never be satisfied, but he will never achieve anything worthwhile. " -- Walter Chrysler, automaker
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BAE
Bureau of Agricultural Economics
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