When the size of the market increases, the relationship between the number of firms in the market and the average total cost shifts upward.

Question

Quizplus · Accepted Answer

When the size of the market increases, the relationship between the number of firms in the market and the average total cost is unclear and can vary depending on the market structure and other market factors. In some cases, the average total cost may shift upward, but in other cases, it may stay the same or even decrease. Therefore, the statement is false.

When the Size of the Market Increases, the Relationship Between