This video goes over the construction of the long run average total cost curve by showing how it relates to the many possible short run average total cost curves. It then discusses how economies of scale, constant returns to scale, and diseconomies of scale can be seen on the long run average cost curve.
Essentially we are taking multiple short run average total cost curves with varying levels of capital and figuring out why they have a U shape in the long run. This is also explored by discussing what returns we get from "doubling" the inputs. If it is less than double then we are experiencing diseconomies of scale and if it more than doubles than we are experiencing economies of scale. Finally, if it exactly doubles then we are experiencing constant returns to scale.
More information on this topic can be found at [ Ссылка ]
