The U shape of the long-run average total cost curve is primarily due to:
A) technological change.
B) economies and diseconomies of scale.
C) increasing and then diminishing returns.
D) diminishing returns.

Question

Quizplus · Accepted Answer

The U shape of the long-run average total cost curve is due to economies of scale, which cause costs to decrease, and diseconomies of scale, which cause costs to increase as output expands.

The U Shape of the Long-Run Average Total Cost Curve