[amp_mcq option1=”Falls” option2=”Rises” option3=”Remains constant” option4=”All of the above” correct=”option1″]<\/p>\n
The correct answer is: A. Falls.<\/p>\n
The average cost (AC) curve is a graph that shows the average cost of producing a good or service as the output level changes. The AC curve is U-shaped, which means that it falls at first and then rises. This is because when output is low, the average cost of production is high because fixed costs are spread over a small number of units. As output increases, fixed costs are spread over a larger number of units, and the average cost of production falls. However, as output continues to increase, the law of diminishing returns sets in, and the average cost of production begins to rise.<\/p>\n
Option B is incorrect because the AC curve falls at first and then rises. Option C is incorrect because the AC curve does not remain constant. Option D is incorrect because only option A is correct.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Falls” option2=”Rises” option3=”Remains constant” option4=”All of the above” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-48577","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n