UPW-Classic is a new water filtration company. It makes faucet filtration systems. The CEO is wondering about their production costs. Why the marginal cost (MC) curve of their products has a "U" shape, e.g. it decreases initially and then increases? In the short-run, when the average variable cost (AVC) curve will be the lowest? As for the long-run AVC curve, how is it formed? Please make an intuitive explanation to these questions.