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Economics (AS & A Level) · Oct / Nov 2021 · Paper 31 · Question 8

9708Types of cost, revenue and profit, short-run and long-run production

A firm always operates with economies of scale in the long run. What is the shape of its long-run average cost curve?

  1. AIt is horizontal.
  2. BIt is 'U' shaped.
  3. CIt slopes downwards.
  4. DIt slopes upwards.

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Correct answer: C. It slopes downwards.

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