Section 11.4 U-Shaped Average Total Cost Curve exhibit 2 Hgh AFC H ATC Hgh MC MC ATC Mrmum Dmnheg marg AFC Quantity of Output At low levels of outut, ATCia high becane AFCis high-the fed plant is undentiled At high levels of autput ose to capacty. the fed plart is overutikaed, leading to high MCand. conseguenty, high ATCtis dimisishing marginal product that causes the MC, and eventualy the AVCand ATC, to rise In U-Shaped Average Total Cost Curve above Section 11.4 exhibit 2, why does AFC continue to fall even while ATC rises at very high output? Cost per Unit dollars)

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13.
Section 11.4
U-Shaped Average Total
Cost Curve
exhibit 2
High AFC
Hgh ATC
High AMC
High AFC
MC
ATC
Mnmum
of ATC
Dininishing margina
poduct sets in
AFC
Quantity of Output
t low levels of output, ATC is high because AFCIS high-the
fixed plant is underutiled. At high levels of output (dose to
capacity. the faed plart is overutikzed, leading to high MC and,
consequerity, high ATC. R is diminishing marginal product that
causes the MC, and eventualy the AVC and ATC, to rise
In U-Shaped Average Total Cost Curve above Section 11.4
exhibit 2, why does AFC continue to fall even while ATC rises
at very high output?
Cost per Unit (dollars)
Transcribed Image Text:13. Section 11.4 U-Shaped Average Total Cost Curve exhibit 2 High AFC Hgh ATC High AMC High AFC MC ATC Mnmum of ATC Dininishing margina poduct sets in AFC Quantity of Output t low levels of output, ATC is high because AFCIS high-the fixed plant is underutiled. At high levels of output (dose to capacity. the faed plart is overutikzed, leading to high MC and, consequerity, high ATC. R is diminishing marginal product that causes the MC, and eventualy the AVC and ATC, to rise In U-Shaped Average Total Cost Curve above Section 11.4 exhibit 2, why does AFC continue to fall even while ATC rises at very high output? Cost per Unit (dollars)
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