A U-shaped long-run average cost curve implies that a firm experiences economies of scale at low levels of production and diseconomies of scale at high levels of production.

Question

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A U-shaped long-run average cost curve indicates that a firm experiences decreasing average costs (economies of scale) at low levels of production, followed by constant average costs, and then increasing average costs (diseconomies of scale) at high levels of production.

A U-Shaped Long-Run Average Cost Curve Implies That a Firm