A group of friends recently started manufacturing specialty T-shirts. The business has grown rapidly, with monthly production up from 50 to 250 in the first 6 months. During this same period, average production cost has been cut in half. The firm's long-run average cost curve over this range of output:
A) is downward sloping.
B) is upward sloping.
C) is horizontal.
D) may be any of the above.

Question

Quizplus · Accepted Answer

The Answer of A group of friends recently started manufacturing specialty T-shirts. The business has grown rapidly, with monthly production up from 50 to 250 in the first 6 months. During this same period, average production cost has been cut in half. The firm's long-run average cost curve over this range of output:
A) is downward sloping.
B) is upward sloping.
C) is horizontal.
D) may be any of the above.

A Group of Friends Recently Started Manufacturing Specialty T-Shirts