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The Short-Run Average Cost Curve Has a "U" Shape Because

Question 31

Multiple Choice

The short-run average cost curve has a "U" shape because:


A) large firms are not quite as efficient as small firms, so average costs tend to increase.
B) specialization will result in lower average costs and diseconomies of scale will increase average costs.
C) worker specialization will tend to lower average costs, while diminishing returns will increase average costs.
D) economies and diseconomies of scale both have an impact on the curve.

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