Average costs_____ initially due to the presence of fixed costs and then _____due to increasing marginal costs
A)rise;rise
B)rise;fall
C)fall;rise
D)fall;fall

Question

Average costs_____ initially due to the presence of fixed costs and then _____due to increasing marginal costs​
A)​rise;rise
B)rise;fall
C)fall;rise
D)​fall;fall

Quizplus · Accepted Answer

Average costs fall initially due to the presence of fixed costs being spread over an increasing number of units, leading to economies of scale. However, as production continues to increase, increasing marginal costs due to factors such as labor inefficiencies or resource limitations cause average costs to rise.

Average Costs_____ Initially Due to the Presence of Fixed Costs