average total cost definition short run
In the short run, the shape of the average total cost curve (ATC) is U-shaped. The, short run average cost curve falls in the beginning, reaches a minimum and then begins to rise.The reasons for the average cost to fall in the beginning of production are that the fixed factors of a firm remain the same.The change only takes place in the variable factors such as raw material, labor, etc.he, short run average cost curve falls in the beginning, reaches a minimum and then begins to rise. The reasons for the average cost to fall in the beginning of production are that the fixed factors of a firm remain the same. The change only takes place in the variable factors such as raw material, labor, etc.