(i) A significant recent development in cost theory is that the long-run average cost curve is L-shaped rather than U-shaped.
(ii) The L-shape of the long-run average cost curve implies that in the beginning when output is expanded through increase in plant size and associated variable factors, cost per unit falls rapidly due to economies of scale.
(iii) 
 

Marginal Cost:
Marginal cost is defined as the addition made to the total cost by the production of one additional unit of output symbolically.
MC_n = TC_n - TC_n-1 (or) TC_n+1- TC_n
where,
"MC" - Marginal cost.
"TC" - Total cost.
"TC_n" - denotes total cost of "n"^th item.
TC_n-1 - denotes Total cost "n-1"^th item.
TC_n+1 - denotes Total cost of "n+1"^th item.
Marginal cost schedule and MC curve is shown in the following diagram.

It is to be noted that,
a) MC falls at first due to more efficient use of variable factors.
b) MC curve increases after the lowest point and it slopes upward.
a) MC curve is a "U"- shaped curve.
b) The slope of TC is Me.
If TC = Q3 -18Q2 + 91Q + 12
MC = 3Q2 - 36Q + 91

Short run is a period of time over which certain factors of production cannot be changed, and such factors are called fixed factors. The factors whose quantity can be changed in the short run are variable factors. Long run is a period of time over which all factors of production can be changed, to meet the changes in demand.

(i) Private cost is the cost incurred by a firm for production. It includes both implicit costs and explicit costs.
(ii) Social costs are those costs, which are not borne by the producing firm but are incurred by others in society. For example, when an oil refinery discharges its waste in the river causing water pollution, such a pollution results in tremendous health hazards which involve costs to the society as a whole.

(i) It refers to the total cost per unit of output.
(ii) ATC=TC/Q (or)
(iii) ATC=AFC+AVC

(iv) ATC curve is also a 'U' shaped curve.
(v) Initially the ATC declines reaches a minimum when the plant is operated optimally, and rises beyond the optimum output.
(vi) The 'U' shape of the AC reflected the law of the variable proportions.