Question

Why are AVC, ATC and MC curves U-shaped?

Answer 1

Answer:

The MC curve intersects the ATC curve and the AVC curve at their minimum points. The ATC curve is U-shaped because ATC is the sum of AFC and AVC. The U-shape reflects the factors that determine the shapes of those two curves: ... The AVC curve is U-shaped because of decreasing marginal returns.

Explanation:

done.

Answer 2

• Average fixed cost is a mixture of both average fixed cost and variable cost.  
• Average fixed cost is a downward sloping curve as when the production increases the fixed cost of a product decreases.  
• Average variable cost is a slight u shaped curve because the variable cost decreases initially with the increase in production but as the production goes on it increases with the increase in output.
• MC curve is a u shaped curve as initially  with the increased production, the labour is utilized in an optimum manner which decreases the cost. As we increase more and more of production the marginal cost increases with the additional output during the production process.