The Diagram Shows the Short-Run Average Total Cost Curves for Five

question 353

Multiple Choice

The diagram shows the short-run average total cost curves for five different plant sizes of a firm. The shape of each individual curve reflects

• A)increasing returns, followed by diminishing returns.
• B)economies of scale, followed by diseconomies of scale.
• C)constant costs.
• D)increasing costs, followed by decreasing costs.

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