The average total cost curve eventually slopes upwards because of the
A) law of diminishing returns.
B) reductions in average fixed costs.
C) increase in capital costs.
D) decrease in labor costs.

Question

Quizplus · Accepted Answer

The average total cost curve eventually slopes upwards due to the law of diminishing returns, which states that adding more of a variable input to a fixed input will eventually yield lower additional output, increasing the average cost.

The Average Total Cost Curve Eventually Slopes Upwards Because of the