Skip to main content

How does one draw a long run average cost curve using the set of data in the second question in the attached image?

In order to draw a long run average cost curve (LRAC), you have to know what information is needed. As you can see in the link below, the vertical axis of an LRAC shows the cost of making a given product. The horizontal axis of the graph shows the amount of the product that is produced.  What this means is that an LRAC shows how much it will cost (in terms of average cost per unit) to produce various quantities of a product.


If you look at the table in the image you have attached, you will see that you have the information you need.  The table gives you a lot of extraneous information that you do not need to draw your LRAC.  As mentioned above, all you need to know is the average costs per unit for each quantity produced. This information is in the bottom two rows of the table.  The table tells you, for example, that it costs .065 per kilowatt-hour to generate 5 million kilowatt-hours.  This gives you an ordered pair that you can graph because .065 is your cost (y value) and 5 million is your quantity (x value).  Plot the three points that you are given, then draw a curve that fits all three points.  The curve is your LRAC.

Comments

Post a Comment

Popular posts from this blog

Is there a word/phrase for "unperformant"?

As a software engineer, I need to sometimes describe a piece of code as something that lacks performance or was not written with performance in mind. Example: This kind of coding style leads to unmaintainable and unperformant code. Based on my Google searches, this isn't a real word. What is the correct way to describe this? EDIT My usage of "performance" here is in regard to speed and efficiency. For example, the better the performance of code the faster the application runs. My question and example target the negative definition, which is in reference to preventing inefficient coding practices. Answer This kind of coding style leads to unmaintainable and unperformant code. In my opinion, reads more easily as: This coding style leads to unmaintainable and poorly performing code. The key to well-written documentation and reports lies in ease of understanding. Adding poorly understood words such as performant decreases that ease. In addressing the use of such a poorly ...
Post a Comment
Read more

Is 'efficate' a word in English?

I routinely hear the word "efficate" being used. For example, "The most powerful way to efficate a change in the system is to participate." I do not find entries for this word in common English dictionaries, but I do not have an unabridged dictionary. I have checked the OED (I'm not sure if it is considered unabridged), and it has no entry for "efficate". It does have an entry for "efficiate", which is used in the same way. Wordnik has an entry for "efficate" with over 1800 hits, thus providing some evidence for the frequency of use. I personally like the word and find the meaning very clear and obvious when others use it. If it's not currently an "officially documented" word, perhaps its continued use will result in it being better documented.
Post a Comment
Read more