Explain why the long-run average cost is typically U-shaped
As firms grow, they can take advantage of mass production economies. However, large firms are more difficult to manage. This eventually causes an upturn in average cost even if there continues to be mass-production economies. Note that the long-run shape has nothing to do with diminishing returns, which is a short-run law.
Economics
You might also like to view...
What are the factors that will determine the size of some future required tax increase to pay off all debt?
What will be an ideal response?
Economics
In the United States, day-to-day decisions about monetary policy are carried out by
A) the Board of Governors. B) the Chairman of the Board of Governors. C) the Federal Open Market Committee. D) the Open Market desk in New York. E) none of the above
Economics