The above diagram shows the short-run average total cost curves for five different plant sizes of a firm.The position of these five curves in relation to one another reflects:

Question

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The position of the five curves in relation to one another reflects economies and diseconomies of scale. As the firm increases in size, it experiences economies of scale up to a certain point (point C), reflected by the downward-sloping portion of each curve. Beyond that point, the firm experiences diseconomies of scale, reflected by the upward-sloping portion of each curve.

The Above Diagram Shows the Short-Run Average Total Cost Curves