JAMB Economics 2018 Objective — Question 21

Question 21 of 40 from the Joint Admissions and Matriculation Board (JAMB) Economics 2018 Objective paper, with the correct answer and a full explanation.

The U-shaped nature of the long run average cost curve is explained by

A. Law of variable proportion
B. Law of diminishing returns
C. Law of diminishing marginal utility
D. Return to scaleCorrect

Explanation

The U-shape of the LRAC curve reflects returns to scale: economies of scale (falling AC) followed by diseconomies of scale (rising AC).

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