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Question
Which shape best describes the marginal cost (MC) curve in the short run?
Options
Horizontal straight line
Downward sloping straight line
U-shaped curve
Vertical straight line
MCQ
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Solution
U-shaped curve
Explanation:
The MC curve is U-shaped because marginal cost first falls due to better use of variable and fixed factors, then eventually rises when excessive use of the variable factor causes diminishing returns and inefficiency.
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