The average curve and the marginal curve are U-shaped in the short-run and flatter in the long-run due to________

  • A Economies of scale
  • B Money cost
  • C Opportunity cost
  • D Cost functions
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The correct answer is A. Economies of scale

Economies of scale which is also known as scale of production set the size of plant, the number of plants installed and the technique of product. In the short-run, there is no time for the plant to expand while in the long-run, there is enough time for the firm to expand its size of plant which makes the AC α MC shape flatter.

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