Question

Economies of scale are when long-run costs are falling, so do day-to-day costs (like labor) really have an effect on the long run since they are always paid in the short run? Why or why not?

Answer 1

It can be mentioned that day to day costs have an effect in the long run this is because of the fact that in the long run what happens is the input factors get to adjust themselves in terms of cost as a result of which the costs can go up or go down. If the cost go down in the productivity level go up for each input then the economies of scale can be high when compared to the case where costs go up and therefore in the long run the daily costs also have a role to play in determining the level of economies of scale where it can continuously change in the short run but settle at a point in the long run and therefore the given statement can be agreed