Discussion
Assertion (A) : The long run cost curve is L shaped rather than U shaped.
Reason (R) : The new technique of production of large plants reduce the total cost per unit of output in the long run.
Codes :
Answer: A
Both statements are true and the reason correctly explains the assertion. The long run average cost curve is described as L shaped, not U shaped, because as new techniques of production in large plants lower the unit cost, the cost falls and does not rise again at large outputs.
The reason supplies exactly this mechanism, so the first code is correct. The codes that treat A or R as false contradict the standard view that modern technology gives economies without a clear rising stage.
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