Option 1 -> Incomplete as it ignores the shape of LRMC.
Option 2 -> Partially correct but LRMC is not just upward sloping, it has a U shape.
Option 3 -> Rectangular hyperbola is not the shape of cost curves in long run.
Option 4 -> Both LRAC and LRMC are U shaped.
Hence, U shaped -> Both the long-run average cost (LRAC) curve and long-run marginal cost (LRMC) curve are U-shaped. The LRAC is U-shaped due to economies of scale (declining costs initially) and diseconomies of scale (rising costs later). The LRMC is also U-shaped and intersects the LRAC at its minimum point. LRMC falls first, reaches its minimum before LRAC's minimum, then rises as output increases -> correct