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30 November, 18:28

True or false. the u shape of the long-run atc curve is the result of diminishing returns.

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  1. 30 November, 20:37
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    The U shape of the long-run ATC curve is the result of diminishing returns. This statement is false. This shape happens because of the dominance of AFC thus the ATC is falling but after a while, the AVC becomes dominant and ATC starts to rise.

    Definition of terms:

    ATC - Average Total Cost

    AFC - Average Fixed Cost

    AVC - Average Variable Cost
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