The short-run average variable cost curve _____
A)is always downward sloping.
B)starts at the origin and always slopes upward.
C)starts above the origin and always slopes upward.
D)is a horizontal line intersecting the vertical axis.
E)slopes downward at low rates of output and then slopes upward at higher rates of output.

Question

Quizplus · Accepted Answer

The short-run average variable cost curve typically slopes downward at low rates of output due to increasing returns to the variable factor (e.g., labor efficiency improvements) and then slopes upward at higher rates of output due to diminishing returns to the variable factor.

The Short-Run Average Variable Cost Curve _____