Suppose the AC curve is U-shaped. Then an increase in a recurring fixed cost will cause the AC curve to shift up, with its lowest point shifting to the right.
Answer the following statement true (T) or false (F)
True
Rationale: The new AC curve will converge to the original one (as the increase in the FC becomes smaller and smaller on average) -- and this implies that the original AC curve shifts up, with the lowest point shifting to the right.
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Fill in the blank(s) with the appropriate word(s).
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