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Why is the short run marginal cost curve U-shaped?
ABecause of the law of variable proportions
BBecause fixed costs keep rising
CBecause price keeps changing
DBecause of constant returns to scale
Answer & Solution
Correct answer: A. Because of the law of variable proportions
Initially marginal product rises, lowering the input needed per extra unit, and later it falls, so SMC falls and then rises.
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