One of the Major Reasons for the U-Shaped Average Total

question 55

Multiple Choice

One of the major reasons for the U-shaped average total cost curve is the fact that

• A) there are increasing returns from labor regardless of the number of workers employed.
• B) there eventually are decreasing returns from labor as more workers are employed.
• C) prices fall as output increases.
• D) the average fixed cost increases as more output is produced.
• E) the variable cost decreases as more output is produced.

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