explain the difference between prime cost and conversion cost
Variable cost Direct labor and overhead are often called conversion cost,[3] while direct material and direct labor are often referred to as prime cost.[3]
Cost curve 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.[3]:208 When long-run marginal costs are below long-run average costs, long-run average costs are falling (as to additional units of output).[3]:207 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.