The Short-Run Average Total Cost Curve Is U-Shaped Because

question 7

Multiple Choice

The short-run average total cost curve is U-shaped because

• A)average fixed costs decline continuously as output increases.
• B)of increasing and diminishing returns.
• C)of economies and diseconomies of scale.
• D)minimum efficient scale is encountered.Topic: Short-Run Production Relationships

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Definitions:

Personal Prejudices

Preconceived opinions or biases held by an individual that are not based on reason or actual experience.

Higher Costs

An increase in the expenses associated with production, operation, or acquisition in business or personal finances.

Worker Productivity

Worker productivity measures the output of goods and services produced per unit of labor input, often considered over a specific period of time.

Capital Required

The total amount of financial resources needed to fund a business’s operations and investments, including starting costs, assets, and working capital.