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Question 54

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Use the following to answer questions:
Figure: Long-Run and Short-Run Average Cost Curves Use the following to answer questions: Figure: Long-Run and Short-Run Average Cost Curves   -(Figure: Long-Run and Short-Run Average Cost Curves)  Look at the figure Long-Run and Short-Run Average Cost Curves. If a firm faced the long-run average total cost curve shown in the figure and it expected to produce 100,000 units of the good in the long run, the firm should build the plant associated with: A)  ATC<sub>1</sub>. B)  ATC<sub>2</sub>. C)  ATC<sub>3</sub>. D)  ATC<sub>1</sub> or ATC<sub>2</sub>.
-(Figure: Long-Run and Short-Run Average Cost Curves) Look at the figure Long-Run and Short-Run Average Cost Curves. If a firm faced the long-run average total cost curve shown in the figure and it expected to produce 100,000 units of the good in the long run, the firm should build the plant associated with:


A) ATC1.
B) ATC2.
C) ATC3.
D) ATC1 or ATC2.

Correct Answer:

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