The Long-Run Average Cost Curve Is U-Shaped Because of Which

question 28

Multiple Choice

The long-run average cost curve is U-shaped because of which of the following?

• A) Constant fixed costs as output is increased.
• B) Decreasing average fixed costs as output is increased.
• C) Economies and diseconomies of scale.
• D) Decreasing marginal returns as more labour is hired.
• E) Increasing marginal returns as more labour is hired.

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Definitions:

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