The average total cost curve
A) increases eventually because of diminishing returns.
B) diminishes initially because average fixed costs diminish.
C) is U- shaped.
D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

The average total cost curve is U-shaped due to initially decreasing average fixed costs and eventually increasing costs due to diminishing returns, encompassing all the given reasons.

The Average Total Cost Curve