A group of friends recently started manufacturing specialty T-shirts.

A group of friends recently started manufacturing specialty T-shirts. The business has grown rapidly, with monthly production up from 50 to 250 in the first 6 months. During this same period, average production cost has been cut in half.

The firm’s long-run average cost curve over this range of output A) is downward sloping.
B) is upward sloping.
C) is horizontal.
D) may be any of the above.

ANSWER

D