Why are long-run average-total-cost curves often U-shaped
A)for the same reasons that short-run average-total-cost curves have the identical U-shape
B)because of constant returns to scale
C)because of increasing coordination problems at low levels of production and increasing specialization of workers at high levels of production
D)because of increasing specialization of workers at low levels of production and increasing coordination problems at high levels of production

Question

Quizplus · Accepted Answer

In the long run, average total cost curves are U-shaped due to increasing specialization of workers at low levels of production, which reduces costs, and increasing coordination problems at high levels of production, which increases costs.

Why Are Long-Run Average-Total-Cost Curves Often U-Shaped