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Harry Bindloss




SHORT 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




Average FC ­ FC/Q
Average VC ­ VC/Q
Average TC ­ TC/Q

Marginal Costs ­ Cost of producing at one extra unit of output.

The law of diminishing returns: This states that when increasing quantities of variable
factors are used in combination with a fixed factor initially productivity…

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