The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3

-Economies and diseconomies of scale are the reasons why short-run average total cost decreases and then increases.

Question

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3
 
-Economies and diseconomies of scale are the reasons why short-run average total cost decreases and then increases.

Quizplus · Accepted Answer

Economies and diseconomies of scale explain why long-run average total costs decrease and then increase, not short-run costs. Short-run costs are influenced by variable and fixed costs, not economies and diseconomies of scale.

The Figure Given Below Shows Three Short Run Average Total