Multiple Choice
The figure below shows a family of cost curves for a firm. The subscripts 1, 2, and 3 for the SRATC curves refer to different plant sizes. 
FIGURE 8- 3
-Refer to Figure 8- 3. If this firm is producing at point B, then
A) this firm is producing a level of output that is technically inefficient in the long run.
B) this firm could produce the same level of output at a lower cost with plant size 2.
C) it should employ more of its variable factors of production.
D) this firm is experiencing decreasing returns to scale.
E) plant size 1 is optimal.
Correct Answer:
Verified
Correct Answer:
Verified
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