Economies of Scale and Long-Run Costs- Micro Topic 3.3

Jacob Clifford introduces economies of scale using movie examples, explaining the difference between short-run and long-run production. He discusses returns to scale, where output can more than double, double, or less than double with increased inputs. Economies of scale lead to lower average costs as production increases, exemplified by movie productions. However, costs can level off or increase, leading to constant or diseconomies of scale. Finally, Clifford emphasizes that production decisions should consider consumer demand, not just costs, to maximize profit.

What new insight or understanding did you gain from this video?