Question

Please provide one particular industry as an example to illustrate that MC is not U-shaped and also provide one particular industry as an example to illustrate that MC is U-shaped.

Answer 1

MC not U shaped -

An example will be an industry where there is natural monopoly. where the cost of entering in to the market is so high such that it is efficient for a single firm to produce. An example wil be reliant energy, It is expesive to build new pipes and so on.

Hence natural monopolies have MC that is not U shaped.

U Shaped

U Shaped indutries are any industries where there are sufficient number of firms in the market. Such as a bread making factory. It is not expensive to make bread, anyone can enter into the market.

Hence the MC is U shaped.