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For Many Firms the LRAC Curve Is U-Shaped

Question 46

Multiple Choice

For many firms the LRAC curve is U-shaped.The downward-sloping portion of the LRAC curve can be explained by

A) economies of scale.
B) the spreading of overhead.
C) both A and B.
D) declining prices of the fixed factor.
E) decreasing short-run marginal cost.

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