Jan van Rooyen owns a hotdog shop. Jan hires an economist who assesses the shape of the hotdog shop's average total cost (ATC) curve as a function of the number of hotdogs produced. The results indicate a U-shaped average total cost curve. Jan's economist explains that ATC is U-shaped for two reasons. The first is the existence of diminishing marginal product, which causes it to rise. What would be the second reason? Assume that the marginal cost curve is linear. (Hint: The second reason relates to average fixed cost)
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