The Journal of Economic Education

ISSN: 0022-0485 (Print) 2152-4068 (Online) Journal homepage: http://www.tandfonline.com/loi/vece20

Visualizing Long-Run Average Cost with an

Interactive Excel Module
Thomas Mitchell
To cite this article: Thomas Mitchell (2009) Visualizing Long-Run Average Cost with an
Interactive Excel Module, The Journal of Economic Education, 40:1, 107-107, DOI: 10.3200/
JECE.40.1.107-107
To link to this article: http://dx.doi.org/10.3200/JECE.40.1.107-107

Published online: 07 Aug 2010.

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Date: 19 May 2016, At: 16:38

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The Online section of the Journal of Economic Education identifies exemplary
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WILLIAM GOFFE, Section Editor

Visualizing Long-Run Average Cost

with an Interactive Excel Module
Thomas Mitchell
URL: http://www.siu.edu/tmitch/long run/discrete/
The distinction between the short run and the long run is so important that we
introduce it to economics and business students in their first year of study and
revisit the concepts throughout the undergraduate and graduate curricula. Whether
we use the term or not, we can describe the long-run average cost curve as the
lower envelope of the underlying short-run average cost curves. This Excel
module makes the idea of a lower envelope come alive in a visual way that is
interactive, dynamic, and gives all control to the user.
The module offers several controls on a single screen to manipulate a chart
showing the long-run average cost curve as the lower envelope of a family of up
to nine U-shaped short-run average cost curves. Spin buttons allow the user to
change the locations of the short-run average cost curves as well as their parabolic
shape. Option buttons allow the user to Show or Hide the short-run and longrun average cost curves. Reset buttons allow the user to reset the worksheet and
chart to one of four preset examples representing constant, increasing, decreasing,
and U-shaped long-run average cost.
The accompanying Web pages derive the long-run average cost curve from
several short-run average cost curves. Although the context is discrete, part of
the flexibility is that the module can be used to illustrate how one extends the
theory from the discrete case to the smooth or continuous case. The module is
offered as a teaching aid for the topic of long-run average cost. The goal is that
learners acquire more intuition and a deeper understanding of long-run average
cost through the use of this flexible and visual resource.

Thomas Mitchell is an associate professor of economics at Southern Illinois University Carbondale

(e-mail: tmitch@siu.edu). Copyright 2009 Heldref Publications

Winter 2009

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