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

question 73

Multiple Choice

The long-run average-total-cost curve is U-shaped because:

• A)a firm initially experiences economies of scale and then diseconomies of scale.
• B)the law of diminishing returns to a factor sets in beyond a certain level of output.
• C)a firm initially experiences diseconomies of scale and then economies of scale.
• D)division of labor keeps labor productivity constant irrespective of expansion or contraction in production.
• E)efficiency of capital increases over a period of time.