<P> The long - run marginal cost curve is shaped by returns to scale , a long - run concept , rather than the law of diminishing marginal returns , which is a short - run concept . The long - run marginal cost curve tends to be flatter than its short - run counterpart due to increased input flexibility as to cost minimization . The long - run marginal cost curve intersects the long - run average cost curve at the minimum point of the latter . When long - run marginal costs are below long - run average costs , long - run average costs are falling ( as to additional units of output ) . When long - run marginal costs are above long run average costs , average costs are rising . Long - run marginal cost equals short run marginal - cost at the least - long - run - average - cost level of production . LRMC is the slope of the LR total - cost function . </P>
why long run cost curve is flatter than short run cost curve
increased input flexibility as to cost minimization