Margo and Stephanie Are Starting Separate T-Shirt Companies

Multiple Choice

Margo and Stephanie are starting separate T-shirt companies. Both will pay the same prices for shirts and stencils, but Margo chooses a more expensive silk screening machine that is capable of producing multiple shirts at once. Stephanie chooses an inexpensivemachine that only makes one shirt at a time. Each machine can be operated by one person. What can we infer about their two operations?

A) Customers will prefer Stephanie's shirts to Margo's.
B) Stephanie's shirts will cost less than Margo's.
C) If Margo and Stephanie each only make one shirt, Stephanie's ATC will be higher than Margo's ATC.
D) The minimum of Stephanie's ATC will be lower than the minimum of Margo's ATC.
E) At some level of output the average total cost for Margo will be lower than the average total cost for Stephanie.