Question
The long-run average total cost curve __________.
graphically demonstrates the relationship between marginal cost and the level of output
graphically demonstrates average variable cost
is C-shaped
graphically demonstrates that there are diseconomies of scale as output increases after the initial range of output
graphically demonstrates the relationship between marginal cost and the level of output
graphically demonstrates average variable cost
is C-shaped
graphically demonstrates that there are diseconomies of scale as output increases after the initial range of output
Answers
GPT-4o mini
The long-run average total cost curve **is C-shaped**.
This shape reflects the typical behavior of average total costs as output increases. Initially, as production increases, average total costs tend to decrease due to economies of scale. However, after reaching a certain point, average total costs may begin to rise due to diseconomies of scale. So, the C-shaped curve illustrates this relationship effectively.
The other choices provided do not accurately represent what the long-run average total cost curve demonstrates.
This shape reflects the typical behavior of average total costs as output increases. Initially, as production increases, average total costs tend to decrease due to economies of scale. However, after reaching a certain point, average total costs may begin to rise due to diseconomies of scale. So, the C-shaped curve illustrates this relationship effectively.
The other choices provided do not accurately represent what the long-run average total cost curve demonstrates.