The negatively sloped part of long run cost curve of a firm is due to __________.

economies of scale such as specialization and division of labour

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diseconomies of scale

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diminishing returns to scale

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marginal utility theory

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Solution

The correct option is A economies of scale such as specialization and division of labour
The long run average cost curve initially has a negative slope to illustrate how average cost initially decreases due to economies of scale while the firm experiences increasing returns to scale.

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