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    Question

    The reasons for L-shaped long run average cost curve is/are

    A technological progress Correct Answer Incorrect Answer
    B learning by doing Correct Answer Incorrect Answer
    C both 'A' and 'B' Correct Answer Incorrect Answer
    D None of the above Correct Answer Incorrect Answer

    Solution

    The L-shape of the long-run average cost curve implies that in the beginning when output is expanded through increase in plant size and associated variable factors, cost per unit falls rapidly due to economies of scale.

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