All else equal, if a firm's long- run average cost curve increases as more of an input is produced and the firm requires a large quantity of the input, it is likely cost saving for the firm to buy the input from another firm.

Question

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If the firm's long-run average cost curve increases as it produces more of an input, it indicates diseconomies of scale. In such a scenario, it may be more cost-effective for the firm to buy the input from another firm, which produces it more efficiently and at a lower cost. This way, the firm can benefit from the other firm's economies of scale and save on its costs.

All Else Equal, If a Firm's Long- Run Average Cost