The short-run average total cost curve eventually begins to increase at an increasing rate because of

A) economies of scale.
B) the constraint that the firm cannot change production technologies.
C) diminishing returns.
D) increasing returns to scale.

Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, will begin to decrease.

Average Total Cost

The total cost of production divided by the quantity of output produced.

Economies of Scale

Enterprises achieve cost benefits from their operation size, resulting in a reduction of cost per output unit as the scale expands.