Short Answer
A firm faces the following long-run total-cost curve and is deciding what size factory to build.Refer to the graph below to answer the following questions:
a.When this firm is deciding what size factory to build,is it making a short-run or long-run decision
b.If it wants to produce 200 units,what short-run total-cost curve is consistent with the factory it should choose
What about 450 units and 700 units
c.Is the firm experiencing economies or diseconomies of scale between 200 and 700 units
d.What is the minimum efficient scale of production facing this firm
Correct Answer:
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a.long-run decision
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