The Short- and Long-Run Marginal Cost Curve: A Pedagogical Note
Journal of Economic Education, Vol. 24, No. 1, pp. 34-37, Winter 1993
4 Pages Posted: 29 Dec 2009 Last revised: 3 Aug 2010
Date Written: Winter 1993
The standard textbook description of relationship between the LRMC and the SRMC for output levels below the optimum for a particular plant size is typically misleading and imprecise. Students are frequently confused as to how the SRMC can ever be below the LRMC since everything is variable in the long run. We clarify the reasoning in ways that have intuitive appeal.
Keywords: Short run marginal cost curve, Long run marginal cost curve, economic education
JEL Classification: A22, A23
Suggested Citation: Suggested Citation