Question

Which of the following cost curves is never ‘U’ shaped?
(a) Average Cost Curve
(b) Marginal Cost Curve
(c) Average Variable Cost Curve
(d) Average Fixed Cost Curve

Answer 1

Explanation:

Which of the following cost curves is never ‘U’ shaped?

(a) Average Cost Curve✔️

(b) Marginal Cost Curve

(c) Average Variable Cost Curve

(d) Average Fixed Cost Curve

Answer 2

The correct answer is option (d) Average Fixed Cost Curve.

Explanation:

• A typical average cost curve has a U-shape, because fixed costs are all incurred before any production occurs and marginal costs are typically increasing, because of diminishing marginal productivity.
• Average fixed cost curve can never be U-shaped.
• It is because fixed costs are distributed over a larger volume when the quantity produced increases.
• The average fixed costs curve has a downward slope.
• Hence, the correct answer is option (d).