管理经济学（第14版） 课件 第9章　长期生产与成本

Chapter09ProductionandCostintheLongRunMANAGERIALECONOMICSFoundationsofBusinessAnalysisandStrategyFourteenthEditionCHRISTOPHERR.THOMAS©McGrawHillLLC.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGrawHillLLC.LearningObjectives9.1Graphatypicalproductionisoquantanddiscussthepropertiesofisoquants.9.2Constructisocostcurves.9.3Useoptimizationtheorytofindoptimalinputcombination.9.4Constructthefirm’sexpansionpathandshowhowitrelatestothefirm’slong-runcoststructure.9.5Calculatelong-runtotal,average,andmarginalcostsfromthefirm’sexpansionpath.9.6Explainhowavarietyofforcesaffectlong-runcosts:scale,scope,learning,andpurchasingeconomies.9.7Showtherelationbetweenlong-runandshort-runcostcurvesusinglong-runandshort-runexpansionpaths.2ProductionIsoquantsInthelongrun,allTypeIfixed

inputsbecomevariable,andisoquantsareusedtostudyproductiondecisions.Anisoquantisacurveshowingallpossibleinputcombinationsphysicallycapableofproducingagivenfixedlevelofoutput.Isoquantsaredownward-sloping;ifgreateramountsoflaborareused,lesscapitalisrequiredtoproduceagivenoutput.Anisoquantmapisagraphshowingagroupofisoquants.3Figure9.1ATypicalIsoquantMapAccessthetextalternativeforslideimages.4MarginalRateofTechnicalSubstitution(MRTS)1TheMRTSistheslopeofanisoquantandmeasurestherateatwhichoneinputcanbesubstitutedforanotheralonganisoquantwhilemaintainingaconstantlevelofoutput.TheminussignisaddedtomakeMRTSapositivenumbersinceΔK∕ΔL,theslopeoftheisoquant,isnegative.5MarginalRateofTechnicalSubstitution(MRTS)2TheMRTS

canalsobeexpressedastheratiooftwomarginalproducts:Aslaborissubstitutedforcapital,MPLdeclinesandMPK

risescausingMRTStodiminish.6IsocostCurvesShowvariouscombinationsofinputsthatmaybepurchasedforgivenlevelofexpenditure(C)atgiveninputprices(w,r)Slopeofanisocostcurveisthenegativeoftheinputpriceratio(−w∕r).K-interceptisC∕randrepresentsamountofcapitalthatmaybepurchasedifzerolaborispurchased.7Figure9.2AnIsocostCurve(w=$25andr=$50)Accessthetextalternativeforslideimages.8Figure9.3ShiftinanIsocostCurveAccessthetextalternativeforslideimages.9OptimalCombinationofInputsMinimizetotalcostofproducingagivenQbychoosingtheinputcombinationontheisoquantforwhichQisjusttangenttoanisocostcurve.Thetwoslopesareequalattheoptimalcombination,whichimpliesthatthemarginalproductperdollarspentonthelastunitofeachinputisthesame.10Figure9.4OptimalInputCombinationtoMinimizeCostforaGivenOutputAccessthetextalternativeforslideimages.11Figure9.5OutputMaximizationforaGivenLevelofCostAccessthetextalternativeforslideimages.12OptimizationandCostAn

expansionpath

isthecurveorlocusofpointsthatshowsthecost-minimizinginputcombinationforeachlevelofoutput.Derivedforaspecificsetofinputprices.Alongtheexpansionpath,theinput-priceratioisconstantandequalstothemarginalrateoftechnicalsubstitution.13Figure9.6AnExpansionPathAccessthetextalternativeforslideimages.14Long-RunTotalCostsLong-runtotalcost(LTC)foragivenlevelofoutputisgivenby:

LTC=wL*+rK*wherewandrarepricesoflaborandcapital,respectively,and(L*,K*)istheinputcombinationontheexpansionpaththatminimizesthetotalcostofproducingthatoutput.15Figure9.7Long-RunExpansionPathAccessthetextalternativeforslideimages.16Long-RunAverageCostsLong-runaveragecost(LAC)measuresthecostperunitofoutputwhenproductioncanbeadjustedsothattheoptimalamountofeachinputisemployed.LACisU-shaped.FallingLACindicateseconomiesofscale.RisingLACindicatesdiseconomiesofscale.17Long-RunMarginalCostsLong-runmarginalcost(LMC)measurestherateofchangeinlong-runtotalcostasoutputchangesalongexpansionpathLMCisU-shaped.LMCliesbelowLACwhenLACisfalling.LMCliesaboveLACwhenLACisrising.LMC=LACattheminimumvalueofLAC.18Table9.1DerivationofaLong-RunCostSchedule(1)(2)(3)(4)(5)(6)Least-CostCombinationofOutputLabor(units)Capital(units)TotalCost(LTC)(w=$5,r=$10)Long-RunAverageCost(LAC)Long-RunMarginalCost(LMC)100107$120$1.20$1.202001281400.700.2030020102000.670.6040030153000.751.0050040224200.841.2060052305600.931.4070060427201.031.6019Figure9.8Long-RunTotal,Average,andMarginalCostAccessthetextalternativeforslideimages.20Figure9.9Long-RunAverageandMarginalCostCurvesAccessthetextalternativeforslideimages.21EconomiesofScaleEconomiesofscaleoccurswhenlong-runaveragecost

(LAC)

fallsasoutputincreases.Large-scalefirmsareabletotakegreateradvantageofopportunitiesforspecializationanddivisionoflabor.Dividingproductionintoseparatetasksallowsworkerstospecializeandbecomemoreproductive,loweringunitcosts.ScaleeconomiesalsoarisewhenTypeIIfixedinputcostsarespreadovermoreunitsofoutputcausingLACtofall.Economiesofscalecanoccurduetosetupcosts,whicharecostsincurredonetimebeforeproductioncanbegin,andthesecostsareusuallysunkcosts.VarietyoftechnologicalfactorscanalsocontributetofallingLAC.22DiseconomiesofScaleDiseconomiesofscaleoccurswhenlong-runaveragecost(LAC)

risesasoutputincreases.Generallyattributedtolimitationstoefficientmanagementandorganizationofthefirm.Thecostofmonitoringandcontrollinglarge-scalebusinesseseventuallyleadstorisingunitcosts.23Figure9.10EconomiesandDiseconomiesofScaleAccessthetextalternativeforslideimages.24ConstantCostsWithconstantcosts,neithereconomiesnordiseconomiesofscaleoccur.Firmexperiencesconstantcostsinthelongrun.LACcurveisflatandequaltoLMCatalloutputlevels.25Figure9.11TheSpecialCaseofConstantCosts:LMC=LACAccessthetextalternativeforslideimages.26MinimumEfficientScale(MES)Theminimumefficientscaleofoperation(MES)isthelowestlevelofoutputneededtoreachtheminimumvalueoflong-runaveragecost.27Figure9.12MinimumEfficientScaleAccessthetextalternativeforslideimages.28Figure9.13MESWithVariousShapesofLACAccessthetextalternativeforslideimages.29EconomiesofScope1Existforamultiproductfirmwhenthejointcostofproducingtwoormoregoodsislessthanthesumoftheseparatecostsofproducingthetwogoods:LTC(X,Y)<LTC(X,0)+LTC(0,Y)FirmsalreadyproducinggoodXcanaddproductionofgoodYatalowercostthanasingle-productfirmcanproduceY:LTC(X,Y)–LTC(X,0)<LTC(0,Y)30EconomiesofScope2Reasonsforeconomiesofscope:JointproductsWhenproductionofgoodXcausesoneormoreothergoodstobeproducedasby-productsatlittleornoadditionalcost.CommonorsharedinputsInputsthatcontributetotheproductionoftwoormoregoodsorservices.31PurchasingEconomiesofScalePurchasingeconomiesofscalearisewhenlargebuyersofinputsreceivelowerinputpricesthroughquantitydiscounts,causingLACtoshiftdownwardatthepointofthediscount.32Figure9.14PurchasingEconomiesofScaleAccessthetextalternativeforslideimages.33LearningorExperienceEconomies“Learningbydoing”or“Learningthroughexperience”Whencumulativeoutputincreases,causingworkerstobecomemoreproductiveastheylearnbydoingandLACshiftsdownwardasaresult.34Figure9.15LearningorExperienceEconomiesAccessthetextalternativeforslideimages.35RelationsBetweenShort-RunandLong-RunCostsLMCintersectsLACwhenthelatterisatitsminimumpoint.AteachoutputwhereaparticularATCistangenttoLAC,therelevantSMC=LMC.ForallATCcurves,thepointoftangencywithLACisatanoutputless(greater)thantheoutputofminimumATCifthetangencyisatanoutputless(greater)thanthatassociatedwithminimumLAC.36Figure9.16Long-RunAverageCost(LAC)asthePlanningHorizonAccessthetextalternativeforslideimages.37RestructuringShort-RunCostsBecausemanagershavegreatestflexibilitytochooseinputsinthelongrun,costsarelowerinthelongrunthanintheshortrunforalloutputlevelsexceptthatforwhichthefixedinputisatitsoptimallevel.Short-runcostscanbereducedbyadjustingfixedinputstotheiroptimallong-runlevelswhenthelong-runopportunitytoadjustfixedinputsarises.Theshort-runexpansionpathisahorizontallineshowingthecost-minimizinginputcombinationsforvariousoutputlevelswhencapitalisfixedintheshortrun.38Figure9.17GainsFromRestructuringShort-RunCostsAccessthetextalternativeforslideimages.39Summary1Inthelongrun,allfixedinputsbecomevariableinputs.Anisoquantisacurveshowingallpossibleinputcombinationscapableofproducingagivenlevelofoutput.Themarginalrateoftechnicalsubstitution,MRTS,istheslopeofanisoquantandmeasurestherateatwhichthetwoinputscanbesubstitutedforoneanotherwhilemaintainingaconstantlevelofoutput.Isocostcurvesshowthevariouscombinationsofinputsthatmaybepurchasedforagivenlevelofexpenditureatgiveninputprices.Theisocostcurve’sslopeisthenegativeoftheinput-priceratio.40Summary2Minimizetotalcostofproducingagivenquantityofoutputbychoosingtheinputcombinationontheisoquantthatisjusttangenttoanisocostcurve.Thetwoslopesareequalinequilibrium.Maximizingoutputforagivenlevelofexpenditurerequireschoosinganinputcombinationsatisfyingtheexactsameconditionsasforminimizingcosts.Theexpansionpathshowstheoptimal(orefficient)inputcombinationforeverylevelofoutput;long-runcostcurvesarederivedfromtheexpansionpath.LMC

liesbelow(above)LAC

whenLAC

isfalling(rising);LMC

equalsLAC

atLAC’sminimumvalue.41Summary3WhenLAC

isdecreasing,economiesofscalearepresent,andwhenLAC

isincreasing,diseconomiesofscalearepresent;Economiesofscopearisewhenfirmsproducejointproductsorwhenfirmsemploycommoninputsinproduction.Becausemanagerspossessthegreatestflexibilityinchoosinginputsinthelongrun,long-runcostsarelowerthanshort-runcostsforalloutputlevelsexcepttheoutputlevelforwhichtheshort-runfixedinputisatitsoptimallevel.42EndofMainContent©McGrawHillLLC.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGrawHillLLC.AccessibilityContent:TextAlternativesforImages44Figure9.1ATypicalIsoquantMap

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledasunitsofcapitalanditrangesfrom0to50inincrementsof10.Thehorizontalaxisislabeledasunitsoflaboranditrangesfrom0to75.Threeconcavesupdecreasingcurvesareplotted.ThefirstcurvelabeledQsubscript1equals100,entersfromthetop,passesthroughthepoints(15,50),(20,40),(40,20),(75,10),andextends.ThesecondcurvelabeledQsubscript2equals200isdrawn,slightlyshiftedupandtotherightofthefirstcurve.ThethirdcurvelabeledQsubscript3equals300isdrawn,whichisslightlyshiftedupandtotherightofthesecondcurve.AlinelabeledT,slopesdownwardattherighttouchesthefirstcurveat(40,20)andislabeledaspointA.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.45Figure9.2AnIsocostCurve(w=$25andr=$50)

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledascapital(K)anditrangesfrom0to10inincrementsof2.Thehorizontalaxisislabeledaslabor(L)anditrangesfrom0to20.AsolidlinelabeledKequals8minus1over2timesL,beginsat(0,8),slopesdownwardattheright,andendsatapoint(16,0).TherearefourpointsA,B,C,andDonthelineat(0,8),(4,6),(8,4),and(16,0)respectively.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.46Figure9.3ShiftinanIsocostCurve

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledascapital(K)anditrangesfrom0to12inincrementsof2.Thehorizontalaxisislabeledaslabor(L)anditrangesfrom0to20.AsolidlinelabeledKequals8minus1over2timesL,beginsat(0,8),slopesdownwardattheright,andendsatapoint(16,0).AnothersolidlinelabeledKequals10minus1over2timesL,beginsat(0,10),slopesdownwardattheright,andendsatapoint(20,0).Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.47Figure9.4OptimalInputCombinationtoMinimizeCostforaGivenOutput

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledascapitalanditrangesfrom0to140inincrementsof20.Thehorizontalaxisislabeledaslaboranditrangesfrom0to210.AconcaveupwardcurvelabeledQsubscript1equals1,000entersfromthetopandpassesthroughpointsAat(60,100),Bat(66,90),Eat(90,60),andCat(150,40).Threelineswithdecliningslopesareplotted.Thefirstlinebeginsat(0,140)labeledKprime,passesthroughpoints(60,100)and(150,40),andendsatpoint(0,210)labeledasLprime.Thesecondlinebeginsat(0,134)labeledKdoubleprime,passesthroughapoint(66,90),andendsatpoint(0,201)labeledasLdoubleprime.Thethirdlinebeginsat(0,120)labeledKtripleprime,passesthroughthepoint(90,60),andendsatpoint(0,180)labeledasLtripleprime.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.48Figure9.5OutputMaximizationforaGivenLevelofCost

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledascapital,andithasamarkatKsubscriptr,Ksubscripts,Ksubscripte,andK.ThehorizontalaxisislabeledaslaborandithasmarksatLsubscripte,Lsubscripts,andLsubscriptr.AdeclininglineisdrawnthatpassesthroughpointEat(Ksubscripte,Lsubscripte),(Lsubscripts,Ksubscripts),and(Lsubscriptr,Ksubscriptr)andendsatapointLonthehorizontalaxis.Threeconcaveupwardcurvesareplotted.ThefirstcurvelabeledQsubscript3equals1,700,entersfromthetop,goesdownandtotheright,touchesthelineatpointE,andcontinuesdownandtotheright.ThesecondcurvelabeledQsubscript2equals1,000,isdrawnbyshiftingthefirstcurveslightlyleftanddownward.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.49Figure9.6AnExpansionPath

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledcapitalanditislabeledat0,91,126,150,200,and250.Thehorizontalaxisislabeledlaboranditislabeledat0,118,148,200,300,400,and500.Acurvelabeledexpansionpathbeginsinthefirstquadrantneartheorigin,concaveup,increasestotheright,passesthroughpointsAat(118,91),thenbecomesconcavedownandcontinuesthroughpointsBat(148,126),andCat(200,150),thenextendsattheright.Threeparalleldeclininglinesaredrawn.ThefirstlinebeginsatpointK(0,150),passesthroughpointA,andendsat(300,0)labeledL.ThesecondlinebeginsatapointKprime(0,200),passesthroughpointB,andendsat(400,0)labeledLprime.ThethirdlinebeginsatapointKdoubleprime(0,150),passesthroughpointC,andendsat(500,0)labeledLdoubleprime.Threeconcaveupwardcurvesareplotted.ThefirstcurvelabeledQsubscript1equals500,entersfromthetop,decreases,touchesthelineatpointA,andextendsdownwardattheright.ThesecondcurvelabeledQsubscript2equals700isdrawnwhichisobtainedbyshiftingthefirstcurveslightlyupwardandtotheright.IttouchesthelineatpointB.ThethirdcurvelabeledQsubscript3equals900isdrawnwhichisobtainedbyshiftingthesecondcurveslightlyupwardandtotheright.IttouchesthelineatpointC.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.50Figure9.7Long-RunExpansionPath

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledcapital,Kanditislabeledat0,7,8,10,12,14,and20.ThehorizontalaxisislabeledlaborL,anditislabeledat0,10,12,20,24,28,and40.Adashedcurvelabeledexpansionpathbeginsinthefirstquadrantneartheorigin,concavedown,goesupandtotheright,passesthroughpoints(10,7),thenbecomesconcavedownandcontinuesthroughpoints(12,8),and(20,10),thenbecomesconcaveupandextendsattheright.Threeparalleldeclininglinesaredrawn.Thefirstlinebeginsatpoint(0,12),passesthroughpoint(10,7),andendsat(24,0)labeledL.Thesecondlinebeginsatapoint(0,14),passesthrough(12,8),andendsat(28,0).Thethirdlinebeginsata(0,20),passesthrough(20,10),andendsat(40,0).Threeconcaveupwardcurvesareplotted.ThefirstcurvelabeledQsubscript1equals100,entersfromthetop,decreases,touchesthefirstlineat(10,7),andextendsdownwardandtotheright.ThesecondcurvelabeledQsubscript2equals200isdrawnwhichisobtainedbyshiftingthefirstcurveslightlyupwardandtotheright.Ittouchesthesecondlineat(12,8).ThethirdcurvelabeledQsubscript3equals300isdrawnwhichisobtainedbyshiftingthesecondcurveslightlyupwardandtotheright.Ittouchesthesecondlineat(20,10).Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.51Figure9.8Long-RunTotal,Average,andMarginalCost

-TextAlternativeReturntoparent-slidecontainingimages.ThefirstgraphattheleftistitledPanelA.Theverticalaxisislabeledasthetotalcostindollarsandrangesfrom0to700inincrementsof100.Thehorizontalaxisislabeledasunitsofoutputandrangesfrom0to700inincrementsof100.AcurvelabeledLTC,beginsattheorigin,increasestotheright,andpassesthroughthepoints(100,120),(200,140),(300,200),(400,300),(500,420),(600,560),and(700,720).ThesecondgraphattherightistitledPanelB.Theverticalaxisislabeledaverageandmarginalcostindollarsanditrangesfrom0to1.60inincrementsof0.20.Thehorizontalaxisislabeledunitsofoutputanditrangesfrom0to700inincrementsof100.AcurvelabeledLMC,beginsat(100,1.20)andpassesthroughthepoints(200,0.20),(300,0.60),(400,1.00),(500,1.20),(600,1.40),and(700,1.60).AnothercurvelabeledLACbeginsat(100,1.20)andpassesthroughthepoints(200,0.70),(300,0.67),(400,0.75),(500,0.84),(600,0.93),and(700,1.03).Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.52Figure9.9Long-RunAverageandMarginalCostCurves

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledasaverageandmarginalcost.Thehorizontalaxisislabeledasoutput.Anupward-openingparaboliccurvelabeledLMC,beginsatapointneartheverticalaxisinthefirstquadrant,goesdownandtotheright,concaveup,reachesitslowpointjustaboveQsubscript1onthex-axis.,thengoesupandtotheright,extendstowardsthetoprightcorner.AnothercurveofparabolicshapelabeledLACbeginsatapointontheverticalaxis,goesdownandtotheright,concaveup,intersectsthefirstcurveatapointjustaboveQsubscript2onthex-axis,thengoesupandextendstotheright.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.53Figure9.10EconomiesandDiseconomiesofScale

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledasaverageandmarginalcost.Thehorizontalaxisislabeledasquantity.Anupward-openingparabolicdashedcurvelabeledLMCbeginsatapointneartheverticalaxisinthefirstquadrant,goesdownandtotheright,concaveup,reachesitslowpoint,thengoesupandtotheright,andextendstowardsthetoprightcorner.AnothercurveofparabolicshapelabeledLACbeginsatapointontheverticalaxis,goesdownandtotheright,concaveup,intersectsthefirstcurveatapoint(Qsubscript2,LACsubscriptmin),thengoesupandextendstotheright.Averticaldashedlinepassesthrough(Qsubscript2,LACsubscriptmin),anddividesthequadrantintotwosections.Theregionbetweenthey-axisandtheverticaldashedlineislabeledasEconomiesofscaleandtheregiontotherightoftheverticallineislabeledasDiseconomiesofscale.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.54Figure9.11TheSpecialCaseofConstantCosts:LMC=LAC

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledasaverageandmarginalcost.Thehorizontalaxisislabeledasquantity.AhorizontallinelabeledLACequalsLMC,beginsonthey-axisat(0,20)withanopendot,andextendstotheright.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.55Figure9.12MinimumEfficientScale

-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledlong-runaveragecost(dollars)andthehorizontalaxisislabeledquantity.Acurvebeginsatapointontheverticalaxis,goesdownandtotheright,concaveup,reachesapointlabeledmat(QsubscriptMES,LACsubscriptmin),thenbecomesconstantandextendstotheright,toapointlabeleddat(QsubscriptDIS,LACsubscriptmin),thengoesupandtotheright.AverticallineisdroppedfrompointsmanddonthehorizontalaxisatQsubscriptMESandQsubscriptDISrespectively.TheregionbelowtheconstantcurveislabeledasconstantLAC.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.56Figure9.13MESWithVariousShapesofLAC

-TextAlternativeReturntoparent-slidecontainingimages.ThefirstgraphistitledPanelA,EarlyDiseconomies.Theverticalaxisislabeledaveragecost(dollars)andthehorizontalaxisislabeledquantity.AcurvelabeledLAC,beginsneartheverticalaxisinthefirstquadrant,goesdownandtotheright,concaveup,reachesalowpointm,justaboveQsubscriptMESonthehorizontalaxis,thengoesupandtotheright.ThesecondgraphistitledPanelB,ExtendedEconomies.Theverticalaxisislabeledaveragecost(dollars)andthehorizontalaxisislabeledquantity.AcurvelabeledLAC,beginsneartheverticalaxisinthefirstquadrant,goeslinearlydownandtotheright,thenbecomesconcaveup,reachesalowpointm,justabovethepointQsubscriptMESonthehorizontalaxis,thengoesupandtotheright.ThethirdgraphistitledPanelC,ExtendedconstantLAC.Theverticalaxisislabeledaveragecost(dollars)andthehorizontalaxisislabeledquantity.Acurvebeginsatapointontheverticalaxis,goesdownandtotheright,concaveup,reachesapointlabeledmjustaboveapointQsubscriptMES,thenbecomesconstantandextendstotheright,toapointlabeledd,thengoesupandtotheright.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.57Figure9.14PurchasingEconomiesofScale-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledasthelong-runaveragecost(dollars).Thehorizontalaxisislabeledoutput.AcurvelabeledLACbeginsnearthey-axisinthefirstquadrantandgoeslinearlydownandtotheright,throughapointAat(Qsubscriptt,LAC),reachesalowpointatM,thenconcaveup,increasesandextendstotheright.AnotherdashedcurvelabeledLACprimeisdrawnwhichisobtainedbyshiftingdownward.Itpassesthroughpointaat(Qsubscriptt,LACprime),andlowestpointm.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.58Figure9.15LearningorExperienceEconomies-TextAlternativeReturntoparent-slidecontainingimages.Attheleft,thegraphistitledPanelA,ProductivityRiseswithExperience.Theverticalaxisislabeledastheaverageproductoflabor(unitsofoutputperhouroflabor)anditrangesfrom0to20inincrementsof10.Thehorizontalaxisislabeledascumulativeoutput.Adashedcurvebeginsat(0,10),goesupandtotheright,concavedown,reachesapointIat(8000,20),thenbecomesstraightandextendsattheright.TheconstanthorizontalportionofthecurveissolidandlabeledasAP.TheportionfromstarttoIislabeledasexperience.Attheright,thegraphistitledPanelB,LACshiftsdownasproductivityrises.Theverticalaxisislabeledasthelong-runaveragecost(dollarsperunitofoutput).ThehorizontalaxisislabeledasOutput.AcurvelabeledLACsubscript(APequals10)beginsatapointontheverticalaxis,goesdownandtotheright,concaveup,reachesalowpointm,thengoesupandtotheright.Averticallineisdrawnfrompointmtopoint500onthehorizontalaxis.AnothercurvelabeledLACsubscript(APequals20)prime,beginsatapointontheverticalaxisbelowthefirstcurve,goesdownandtotheright,concaveup,reachesalowpointuppercaseM,thengoesupandtotheright.Averticallineisdrawnfrompointuppercasemtopoint700onthehorizontalaxis.Theverticaldistancebetweenbothcurvesislabeledaslearningeconomies.Notethatalltheabove-mentionedvaluesareapproximate.Returntoparent-slidecontainingimages.59Figure9.16Long-RunAverageCost(LAC)asthePlanningHorizon-TextAlternativeReturntoparent-slidecontainingimages.Theverticalaxisislabeledasaveragecost(dollars)andthehorizontalaxisislabeledasoutput.Therearef