difference between plant curve and planning curve?
Manya, this is pretty easy. Plant curve is related to short-run, while planning curve is related to long-run time period. Basically, plant curve is associated with the short-run average cost curves (SACs), wherein, each SAC is associated to a given plant size.
On the other hand, long-run average cost curve (LAC) is regarded as planning curve, since the firm can choose to produce output with the help of that particular plant size, which enables the firm to incur the minimum possible average cost.
Thus, the basic difference betweent the two concepts as asked by you can be summarised as done below.
1. On the basis of time period
2. On the basis of relation to plants (plan curve relates to a specific plant, while planning curve relates to the LAC (which is an envelope curve to numeorus small plants)
On the other hand, long-run average cost curve (LAC) is regarded as planning curve, since the firm can choose to produce output with the help of that particular plant size, which enables the firm to incur the minimum possible average cost.
Thus, the basic difference betweent the two concepts as asked by you can be summarised as done below.
1. On the basis of time period
2. On the basis of relation to plants (plan curve relates to a specific plant, while planning curve relates to the LAC (which is an envelope curve to numeorus small plants)