The Following Question Are Based on the Following Diagram of the Average

Multiple Choice

The following question are based on the following diagram of the average cost curves for three different-sized plants:

-If the firm is still in the planning stages of plant construction,it should choose the

A) small plant if it expects an output rate below 3,000 units per day.
B) large plant regardless of output because it has the lowest per unit costs.
C) medium-sized plant because it would give the firm the most flexibility, allowing it to produce any output between 0 and 3,000.
D) small plant if it expects an output rate below 1,000 per day.
E) medium-sized plant because it has the advantage of increasing economies of scale.