Review Notes - Long-Run Production and Costs.

- Least Cost Production. How do Firms produce at least cost? Impact of changes in various factors on the use of resources when the firm is in the long run producing at minimum cost? Suppose the price of Capital, the price of Labor, etc; the MPP_K, MPP_L, etc.; increases or decreases, how should the firm respond in each situation to minimize costs?

- Long Run Average Cost Curve. How do we get the LRAC?

- Definition of Economies of Scale, Diseconomies of Scale, Constant Returns to Scale. Why do we observe each?