The Table Given Below Shows the Average Total Cost of Production

question 68

Multiple Choice

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5

-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)the efficiency of capital increases over a period of time.

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