So far, all the nonlinear relationships we've seen are either positively or negatively sloped, but sometimes a single relationship can have portions that are negatively sloped, and other portions that are positively sloped. To the right we show what is often called a U-shaped Long Run Average Total Cost curve.¹⁰

    At lower levels of Q the curve has a negative slope, such as at point A where the slope is - 3/2. However, as Q rises the curve flattens out and at point B the slope is 0 (zero). Then, the curve becomes positively sloped so that at point C the curve has a slope of (positive) 3/2. This suggests that costs are falling as Q increases on the portion of the graph to the left of point B, but costs are rising as Q increases to the right of point B.

¹⁰ For now, don't worry about what this curve means or why it has this shape. We'll study it in detail in Chapter 5.