Homework answers / question archive / The typical average cost curve in a competitive market is _____

The typical average cost curve in a competitive market is _____

Accounting

Share With

The typical average cost curve in a competitive market is _____.

a. U-shape because the firm's fixed costs are first spread over greater quantities, but then increasingly greater quantities will create production capacity constraints

b. an upward-sloping straight line because fixed costs are constant, and variable costs are increasing with the level of output

c. U-shape because increasing quantities of output cause a decrease in fixed costs but an offsetting increase in variable costs

d. downward-sloping until fixed costs are eliminated and then it becomes a horizontal line