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18 Aug 2020
Why does the short-run average total cost (ATC) curve of a firm tend to be U-shaped?
a) larger firms always have lower per-unit costs than smaller firms.
b) at low levels of output, AFC will be high, while at high levels of output MC will be high due to diminishing returns.
c) diminishing returns will be present when output is small, and high AFC will push per unit cost to higher levels when output is large.
d) diseconomies of scale will be present at both small and large output rates.
Why does the short-run average total cost (ATC) curve of a firm tend to be U-shaped?
a) larger firms always have lower per-unit costs than smaller firms.
b) at low levels of output, AFC will be high, while at high levels of output MC will be high due to diminishing returns.
c) diminishing returns will be present when output is small, and high AFC will push per unit cost to higher levels when output is large.
d) diseconomies of scale will be present at both small and large output rates.
Vaishnavi KanukurtiLv10
27 Sep 2020