@fatoomgierdien2181 2 жыл бұрын
Thank you much. Cape Town
@WijthaGayan 2 жыл бұрын
thank you
@tutor2u-official 2 жыл бұрын
You're welcome
@talalnadal7504 Жыл бұрын
god bless u
@solefreakks7905 2 жыл бұрын
🐐
@alexhoward7627 Жыл бұрын
Ok there is something that is REALLY bugging me and I can’t find the answer. By definition, the long run has no fixed costs. So WHY does the fact that there are high fixed costs affect the LRAC??? It should only affect the short run AC curve which would look like an L, but long-run would depend on the economies of scale, which have nothing to do with the fixed costs. Please can you clarify this for me.
@oliviamorgan9680 Жыл бұрын
would it not be to do with their variable costs
@aim04n Жыл бұрын
Their costs are spread out over time, so initially at first they’re paying more for example, like train trains, capital, labour, all of that, but as it gets out of the way - and you can’t really pay a rent on a fixed cost (such as the train tracks) the costs drop in the long run, which leads to the lower AC in the long run, meaning they have lower costs. IN ECONOMICS TERMS: At the beginning of the establishment of the Natural Monopoly, the operating costs and start-up costs are high, however due to the fixed costs being paid off by the firms, the Average costs decrease significantly in the long run, leading to a flatter curve
@alexhoward7627 Жыл бұрын
I think you are making wrong statements here. The huge losses due to high AC > MC are in the short run, long run there are no fixed costs, AC is very low due to only needing to supply the actual water.
@tutor2u-official Жыл бұрын
Infrastructure needs replacing, maintaining, improving, expanding in the long run!
tutor2u
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