{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Causes of ATC behavior

Causes of ATC behavior - So long as fixed and indivisible...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Causes of ATC behavior: ATC passes through three stages. Initially it falls, then it reaches a minimum and is nearly constant; finally it starts increasing. The explanation of such behavior of the ATC runs is as in the case of the laws of variable returns. In the short run, internal economies such as better and efficient performance of machine and manager, better supervision and avoidance of waste, etc. are examples of internal economies. The shape of ATC also depends on the different nature of the fixed and variable inputs.
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: So long as fixed and indivisible factors are not used to their fullest capacity (C1C2) the ATC keeps on falling. Once the fixed capacity is fully utilized the ATC reaches a minimum point (C2). This is the point of optimum utilization of fixed factors . If the output continues to increase beyond this point the fixed factors get over utilized and cause ATC to rise....
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern