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Harry Bindloss




LONG RUN COSTS
The classification between SR, LR and VLR are to do with the four FOP's

In the short run (SR) ­ One of your FOP's is fixed. E.g. Kebab Van ­ Labour
In the long run (LR) ­ Labour is now variable
In the very long…

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Harry Bindloss




Economies of scale: These are the benefits of producing on a large scale resulting in lower
unit costs. If nations specialise in what they are best at not only will output rise due to
comparative advantage but unit costs will fall due to economies of scale. Therefore prices…

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