These changes can be seen on the cost curves below. This describes the cost of producing each output level when the firm is able to adjust all inputs optimally, in other words in the long run all costs are variable and it depends on the firm's production function. In the long run there are three possible effects from an increase in the level of output. These possibilities are shown on the diagram below where the long run average cost curve initially slopes down with the increasing returns to scale, then is flat with constant returns and then slopes up with decreasing returns. Workers and managers can be employed who have specific skills in particular areas.
Some inputs are a minimum size.
If there are two types of machines, one producing 6 units per day and one 4 units per day. A minimum of twelve units would have to be produced, with two producing machines and three packaging machines if all machines are to be fully utilized. The Container principle. Greater efficiency of large machines. Only one worker may be required to operate the machine.