5.6.5. Round Things, Inc.'s production process exhibits economies of scale. Currently its long-run average total cost is $1/unit. If Round Things doubles its use of all inputs, its new long-run average total cost will be $1/unit less than $1/unit. greater than $1/unit but less than $2/unit. greater than $2/unit.

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Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.