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(Figure: Long-Run and Short-Run Average Total Cost Curves)

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(Figure: Long-Run and Short-Run Average Total Cost Curves)
In the figure, in general, if a firm expects to maximize profits, which average total cost (ATC) will it select? Which ATC would a firm typically choose when it is expecting to produce a larger level of output with a lot of physical capital? Which ATC would a firm typically choose when it is expecting output to remain low?
(Figure: Long-Run and Short-Run Average Total Cost Curves) In the figure, in general, if a firm expects to maximize profits, which average total cost (ATC) will it select? Which ATC would a firm typically choose when it is expecting to produce a larger level of output with a lot of physical capital? Which ATC would a firm typically choose when it is expecting output to remain low?

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A firm will choose the average total cos...

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