Q.1 Answers the following CASE STUDY # 2 a) Draw the MC and AVC, ATC curves for
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Q.1 Answers the following
CASE STUDY # 2
a) Draw the MC and AVC, ATC curves for a typical firm. Explain why the curves have U-shapes in general and why they intersect and what does it mean? What a firm do when they intersect? Discuss any three possibilities?
b) Define economies of scale and explain why they might arise. Define diseconomies of scale and explain why they might arise and what is constant return to scale?
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