Principles of Microeconomics / Unit 7 MIC 0633 short lesson, about 20 seconds
Constant Cost Is Not Constant Returns
Captions available
The idea
A constant-cost industry is about input prices staying put as the industry grows. Constant returns to scale is about one firm's average cost staying put as it grows. Different subjects, different curves.
In practice
The first is the industry's long-run supply; the second is a firm's long-run average cost.
Where people slip
The anchor runs the two together; the course keeps them apart, following the witness.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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