Variable Cost With Economies Of Scale Graph. MC passes from the minimum points of both AVC and SAC through the points E and E respectively. Break-even Q FC.
For example land building machinery etc. In a free market economy productively efficient firms optimize their production process by minimizing cost consistent with each possible level of production and the result is a cost curve. MC passes from the minimum points of both AVC and SAC through the points E and E respectively.
There are increasing returns to scale C.
SAC is the short run average cost curve having U-shape. May 19 2020 There are five main types of internal economies of scale. Consumer demand increased production and low-cost materials all created economies of scale in GMs favor and the company achieved what could be called a maximum-minimum efficient scale. The fixed cost increases.
