Answer to Question #101730 in Microeconomics for million

Question #101730
Why are AVC and ATC curves U- shaped in the short run?
1
Expert's answer
2020-01-24T09:46:44-0500

Short run cost curves tend to be U shaped because of diminishing returns. In the short run, capital is fixed. After a certain point, increasing extra workers leads to declining productivity. Therefore, as you employ more workers the marginal cost increases


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