Economics 20th Edition by Campbell McConnell ,Stanley Brue ,Sean Flynn

Exercise 2

FIGURE 9.8 The average-total-cost curve: unlimited number of plant sizes. If the number of possible plant sizes is very large, the average-total-cost curve approximates a smooth curve. Economies of scale, folby diseconomies of scale, cause the curve to be U-shaped.
The unlabeled red curves in this figure derive their shapes from:
A) decreasing, then increasing, short-run returns.
B) increasing, then decreasing, short-run returns.
C) economies, then diseconomies, of scale.
D) diseconomies, then economies, of scale.