The average cost curve of regular products is U-shaped and has an optimal lowest point,but with digital products the average cost per unit declines and quantity increases.

Question

Quizplus · Accepted Answer

This is true about digital products as they do not have physical manufacturing and distribution costs, which causes the average cost per unit to decline as the quantity increases. In contrast, most regular products have a U-shaped average cost curve due to economies of scale and diseconomies of scale.

The Average Cost Curve of Regular Products Is U-Shaped and Has