Question

Why are short period AC and MC curves U-shaped?

Answer 1

Answer:

In the short-run period,the average cost(AC) curve is U -shaped due to the law of variable proportions. This states that as more and more units of a variable factor are applied to the same fixed factor,initially,the total product would increase but would eventually come down.

hope you get it..

Answer 2

The short period AC and MC curves are U-shaped because of the operation of law variable proportion in which marginal price increases and after reaching maximum it decreases.

What is the relation between AC and MC curves?

• When average cost(AC) increase its output then marginal cost(MC) decreases
• When average cost rises with an increase in output then marginal cost is higher than the average cost
• The average cost output and marginal cost output are indeterminate at zero level
• The average cost is equal to marginal cost at the level of optimum output