Use the Following to Answer Questions

Multiple Choice

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 is producing at point C on the ATC₂ but anticipates increasing output to 225,000 units in the long run, the firm will build a _____ plant and have _____ of scale.

A) smaller; economies
B) smaller; diseconomies
C) bigger; economies
D) bigger; diseconomies